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Making a Clean Break … of Your Lease
Question: We are now renting a home but wish to buy another property. If we buy we will need to leave our rental before the end of the lease term. How can we avoid the loss of our deposit?
Answer: A lease can be seen as a contract. In exchange for the right to use a property for a given period, you agree to pay a certain amount each month. The owner expects you to fulfill your obligation just as you expect the landlord to provide a habitable residence in good repair. If you must terminate the lease early then you may be subject to the loss of your deposit and possibly other damages. At the same time, the landlord also has an obligation to re-let the property as quickly as possible to reduce the tenant’s potential damages.
In some cases a lease will have a military clause or an employment clause, which allows the tenant to end the lease early and without penalty. As examples, you may be able to have an early termination if you have find a job 50 miles away. Or, if in the military, you may be able to end the lease if you are relocated. However, as the Coast Guard points out, “contrary to popular belief, the Soldiers’ and Sailors’ Civil Relief Act DOES NOT help you break a lease when receiving transfer orders. You must have a provision in your rental agreement to release you from your obligations in the event you need to terminate your lease prior to its normal expiration.” (Emphasis theirs.)
Given this background it’s clear that both tenants and landlords have obligations.
To consider this question you first have to look at the local market. Do homes rent quickly? If yes then it may be possible to work out an arrangement with the landlord. Here are some steps to take:
First, contact the owner or the owner’s broker. Explain your situation. The owner may simply agree to go along with an early termination.
Second, help the landlord. Make the property available for showing. Make sure the property is clean.
Third, offer to pay the landlord’s advertising costs up to a certain dollar amount.
Fourth, ask about credit. An increasing number of landlords and rental managers now report rental payments to credit bureaus. Historically, negative items have been reported such as late and missed payments, however positive items now can appear on credit reports. Ask your landlord how this will be handled.
Fifth, ask around. Maybe you know someone who can be a replacement tenant, or you know someone who knows someone.
Sixth, the deposit is not a substitute for final month’s rent, so make sure you make the last payment in full and on time. The deposit should be returned to you if you have paid your last month’s rent, less any claims for damages. Depending on your jurisdiction, you may have a right to walk through the property with the landlord or the rental agent to discuss possible repair claims. If you have any problems with getting back your deposit, speak with a local housing office or attorney.
Finally, treat the landlord and the landlord’s broker nicely. After all, you’re asking for a favor. They may be more inclined to assist if you provide early notice and offer to help finding a replacement tenant.
Peter G. Miller is author of "The Common-Sense Mortgage," (Kindle 2016). Have a question? Please write to email@example.com.View Foreclosure Article Archives
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