If you feel stuck in your apartment lease, you are not alone. Many renters want to have the freedom afforded by home ownership, but don’t want to wait until their lease runs its course before they go out and find a new house to rent or buy. Luckily, you are not stuck in your lease as a renter — there are ways that you can get out of a lease relatively quickly! So if you are wondering whether you should buy a house now or wait until later, then you need to read below and see what your options are for how to break your lease in 2020!
1. Read and Understand Your Lease
The first thing you need to do when figuring out whether or not you can skip out on your lease is to sit down and read the agreement in its entirety. Oftentimes, the document will spell out whether or not you will be able to sublet your apartment, as well as any penalties for leaving the agreement before the terms are up. By carefully reading the agreement, you can avoid some of the common home buying mistakes and save yourself time and stress.
In general, your lease document is a powerful tool for understanding your obligations as a tenant, as well as the obligations of your landlord. If you need to break your lease for a reason other than time — for instance, if your living conditions are not suitable or the landlord doesn’t meet their obligations for maintenance and support — then you might have some recourse laid out in your lease agreement. Make sure to read carefully and contact your landlord or property management company if they are not meeting their end of the bargain.
One of the most important parts of reading through your lease is that it will lay out any penalties that you might face for terminating your lease early — which brings us to the second step.
2. Be Aware of Possible Penalties
Your lease may contain explicit penalties that you could face for terminating your lease before the terms have been completely met. These are financial disincentives that are designed to help landlords avoid losing out if you decide to break your lease. Depending on the specifics of your agreement with the landlord, this penalty could be a portion of the total rent, some percentage of your remaining balance, or even the entirety of what you still owe on the lease.
These penalties may seem harsh, but the alternatives could be even more devastating. If you refuse to pay out the penalties that are outlined in your rental agreement, your landlord could reasonably sue you for violating the contract — a far more expensive outcome than the penalty alone.
It is also important to note that there are some situations where you can avoid paying these penalties. As a renter, you have certain rights upon which your landlord may not infringe. If your landlord is violating those rights — or if they are not upholding their obligations as outlined in the lease, then you might have the right to break your lease without facing a harsh financial penalty.
If you believe that your landlord is in violation of the lease, or if you believe that your circumstances might allow you to exercise your tenant rights, then make sure to speak to your real estate agent. They may be able to refer you to a legal professional who specializes in protecting your rights.
3. Speak With Your Landlord
No matter what it says in your lease, it’s usually a good idea to speak with your landlord about your options for leaving the lease agreement early. They will often be understanding, especially if you have a legitimate reason for leaving your apartment that isn’t technically covered by the lease or renter rights.
There’s no guarantee that speaking to the property manager will get you out of the lease scott free, but there’s a chance that you could work something out to pay a lower penalty. Besides, it never hurts to ask!
Another possibility to discuss with your landlord is the option of subletting or finding a new tenant for the apartment. It is in their best interest to have a paying tenant in as many properties as possible. Therefore, you might be able to pay a lower percentage of the rent, or get off the hook entirely, if you are able to bring a new renter to the apartment. There are many ways to find someone to take over your lease, including searching on social media or other online platforms.
Just make sure that you clear it with your landlord first — you don’t want to promise a friend an open apartment before you are sure that it’s possible!
4. Speak With a Real Estate Agent
A lot of people think that they don’t need to contact a real estate agent until well into the home search process — but this couldn’t be farther from the truth!
If you are working with a high-quality real estate team from the beginning, you might have options for getting released from your rental agreement that you would otherwise be lacking.
Most real estate agents (at least, those who are worth your time) are very well-connected with other housing and legal professionals who can help you. This could include legal experts who specialize in renter law, services to connect you with subletters, or other useful vendors. At the Keri Shull Team, we help many renters find their starter house by showing them off-market homes — these are properties that you cannot find on any other home search website. When you buy an off-market home, you can often negotiate more flexible terms that will allow you to free yourself from your lease.
When you have your initial meeting with your real estate agent, the most important thing is to be honest about your situation and needs. If you hold back any information from the agent about your rental situation, they might not be able to help you get out of the lease or soothe the penalties of breaking it.
One specific possibility that you should discuss with your agent is the option of writing a seller credit into the closing agreement on your new home. This credit can be used to cover all or part of the penalty that comes with breaking your lease. By having this caveat as part of your closing deal, you will be able to reduce the stress of timing your home sale to match up with your lease ending. Just make sure that you speak with your agent about whether or not this is a viable strategy — if you are in an intense seller’s market, like some of the hottest DC neighborhoods, then asking for a credit might damage your position and leave you unable to write the best offer on a home.
5. Pay the Penalty
If all else fails, you can always pay the penalty for breaking your lease and get out of the agreement early. The financial cost might be higher than you would like, but it is often worth it if it means getting out of renting and becoming a home owner. Owning a house allows you to build wealth through your home’s value, whereas renting a home offers no such personal investment opportunity.
If you are wondering whether now is the right time for you to buy a home and begin building long term wealth, then you owe it to yourself to speak with a real estate professional about your needs and situation.
And if you are looking for a real estate team to help you learn more, then contact the Keri Shull Team today! All you need to do is click here to schedule a time to speak with one of our Home Search experts!