Most rental agreements have a section regarding the renter breaking and terminating the rent agreement. While there is also likely a section or numerous sections regarding when the leasing agent can evict and forcefully remove the renter, the section on breaking the lease should be of particular interest to those who might be in a position to have to break the lease unintentionally some day. Renters should understand these contract terms and conditions so they can make well informed and intelligent decision. Additionally the student should consider all costs associated with breaking the lease. This includes both financial costs, moving costs as well as emotional costs. Also the need of finding new accommodation. One will need to restart the whole process.
Students should review their rental agreement carefully and understand it before signing this contractual document. The rental agreement is a legally binding document and contract which should be given proper and serious consideration before entering into the agreement. This is important because understanding these terms will be essential and important if the need to break the tenancy becomes a reality.
Rental agreements typically do allow the renter to terminate the lease agreement but not without some form of notice or penalty. This penalty usually comes in the form of requiring the renter to give a specified amount of notice before the contract is up and also requires the renter to pay a sum of money to break the rental agreement. A notice of 30 days and a lease break amount equal to one month’s rent are common penalties associated with breaking a lease, however, individual leasing agents may impose penalties which are either harsher or less severe. Read what applies to your own tenancy agreement.
Consider the financial and emotional Costs of Breaking the Lease.
As previously mentioned there is typically a fee associated with breaking a lease before the date agreed. This fee is often set equal to one month’s rent. While paying this fee may seem excessive and unreasonable there are some instances and situations in which it is an economically good decision to break the contract even though there is a financial penalty imposed.
Consider the example of a student who is the process of relocating due to a career change or university change. The homeowner may opt to rent an apartment in the new city while the house is put up for sale in the previous city or area. If the renter enters into a year contract under the supposition that it will take this long to sell/rent the old apartment and purchase a new house, he may be surprised if his other house sells quickly and he finds a home in his new city rather quickly. This may all occur within a matter of a few months.
The renter has the option to stay in the apartment until the rental agreement nears expiration and then start looking for another property. However, this option runs the risk that the home he previously found will not likely be available. The renters other option is to place a bid on the new house and plan to terminate the lease if he is able to close on the new house. In this case, the renter would be saddled with both a rent and a mortgage for 9-10 months. This will likely be significantly more expensive and costly than the price the renter would pay to end the lease.
The decision to break a lease is not always entirely a financial decision. There are sometimes emotional components, which factor into the equation. For example a student may have only a few months remaining on his rental agreement when he is offered a dream job or university place which will require him to relocate immediately. Although breaking the lease that late in the agreement is usually not financially astute, the renter may make this decision to avoid missing out on a dream job or a university transfer.