Can landlords charge us a lease breakage fee and still keep us on the hook?

August 19, 2005 2:12 PM

My wife and I just had to re-up on our apartment lease a month or so ago, and as luck would have it last week, we found the house of our dreams (we can actually afford it!). Not thinking about the apt. lease ramifications, we placed an offer on the house, it was accepted and now we are 45 days from closing. Now that that's our landlord is telling us that we owe 2 months rent as lease break charge AND rent for any months the apartment remains unlet? Can they do this?

I have heard of one or the other, but both? We live in an Avalon building in Connecticut. I am still trying to dig up my full copy of the lease (not just the renewal portion) so I need to determine that that says about this, but this feels to me like they are trying to screw us because they think they can. To charge a fee and to essentially keep the lease open until the apartment is re-rented seems unethical. Do I have any recourse here?

posted by psmealey to home & garden (13 comments total)

I know landlord/tenants rights vary widely from state to state. But, I was in a similar situation living in a Rockrose building in NYC in 2002. My company transferred me to Chicago and I had to vacate the lease. Rockrose just charged me a one time fee of two months' rent, and that was that.
posted by psmealey at 2:14 PM on August 19, 2005

First, read what the lease says. It probably does say that they can do what they're trying to do. Next, take your lease to the lawyer that's representing you in the closing, fill him in, and see what he thinks. Property law varies in every jurisdiction.

Some landlords will try to do something that is illegal simply because they might get away with it, others will not. However, forcing you to pay rent while the apartment is open is not unethical because you are the ones breaking off the agreement. It would be unethical for the landlord to not bother re-renting the apartment for the whole term and just let you pay, so most states require that a landlord in this position make reasonable efforts to re-rent the space.

The easiest and cheapest thing you can do is try to come up with a new tenant: head to Craigslist, post an ad, maybe even post some flyers. If you can find a substitute tenant, the landlord would be obligated to take them (barring something like bad credit, etc).
posted by MrZero at 2:19 PM on August 19, 2005

Is subletting the apartment out of the question? I would think you could avoid all charges that way.

My husband and I broke both our leases when we moved in together a few years ago. We both did all the legwork to find suitable tenants for our apartments, both of whom are landlord accepted. (We lived in the same building at the time.) There were no fees. Our leases were voided and new leases were written up for the new people.
posted by Sully6 at 2:23 PM on August 19, 2005

However, forcing you to pay rent while the apartment is open is not unethical because you are the ones breaking off the agreement.

That's not what I thought was unethical. My thought was that charging two month's rent for breaking the lease AND continuing to keep the lease open seems over the top. Paying one or the other is fine with us, but both?
posted by psmealey at 2:26 PM on August 19, 2005

Excellent advice, though. MrZero and Sully6. Yes, we could avoid all charges if we were to sublet, but in moving into a new house and adjusting to new aspects of home ownership and the new realities of making mortgage payments, who needs the additional stress of finding tenants and collecting rent from them every month? I would just as soon pay a one-time charge and be done with it. Thank you both for your help!
posted by psmealey at 2:43 PM on August 19, 2005

The reality is if you walk on the lease entirely it's unlikely that they will do anything to you. You'll lose whatever deposit you have, but you're likely to be free of any future encumberance.

BTW, if you can afford it don't overlook the convenience of being able to choose when to move into the new place. If you want to do any substantial remodelling, particularly painting, floors, or carpets, you'll be thankful you still have an apartment that you call home.
posted by Nelson at 2:56 PM on August 19, 2005

The reality is if you walk on the lease entirely it's unlikely that they will do anything to you. You'll lose whatever deposit you have, but you're likely to be free of any future encumbrance.


I would think that would be reported to the credit agencies, which could complicate your financial situation--especially if you do take out loans to remodel the house in the future.

My thought is that if you find a suitable tenant would your landlord be willing to write up a new lease for the this person, freeing you from the rest of your year-long obligation?

I do agree about a penalty of two months' rent plus liability for the remaining months of your lease is steep. Most of my leases have specified a fee between $100-300 if I needed to break the lease and was unable to find a subletter. I'm not sure that it's unethical but it certainly is punitive more than compensatory.
posted by Sully6 at 3:08 PM on August 19, 2005

I would think that would be reported to the credit agencies, which could complicate your financial situation--especially if you do take out loans to remodel the house in the future.

It was always my understanding that landlords couldn't report you to credit agencies. Any experts or real estate lawyers in the hizzouse?
posted by billysumday at 3:24 PM on August 19, 2005

Second what Sully6 said - if you simply walk away, they can evict you for non-payment, which goes on your credit report for the next 7 years. Good luck trying to get a decent rate to refinance your home or purchase another one with that on your record.

The only sure-fire way to know what they can and cannot do is to find your lease. You willfully signed what is a legally binding contract, so if it says that they can charge you a 2 month penalty and continue to charge you rent, then that's what they can do. If either of those provisions are illegal in your state, you could theoretically sue them, but it would most likely end up costing you considerably more than just paying the penalty.

I spent 5 years working for property managers in San Francisco, and can tell you that while there are of course bad apples most are just honest business people. If you try to be reasonable with them, they will be reasonable with you. Even if they have you on the hook for the remainder of the lease, they'd have to be stupid to not try to rent it - they can probably get higher rent from a new tenant, and an empty apartment is a formula for trouble (people breaking in and whatnot).

But you absolutely, positively need to find your lease.
posted by robhuddles at 3:28 PM on August 19, 2005

The best advice was to talk to your lawyer that you will be using to close on the house. This is as close to free legal advice as you can get. They do these things on a fixed fee and will more than likely give you their opinion on this at no extra charge, unless you need them to help directly with the landlord.

In general the landlord needs to mitigate damages by trying to relet the place. That does not mean that the lease may not have a provision for a two month rent early termination penalty. It would seem odd to have to pay both an early termination penalty and cover any unrented months. Ask your lawyer, and good luck.
posted by caddis at 3:42 PM on August 19, 2005

It was always my understanding that landlords couldn't report you to credit agencies.

Wrong.
posted by caddis at 3:56 PM on August 19, 2005

I think caddis is right -- landlords have a duty to try to mitigate damages by trying to rent to someone else. This is a common-law duty, and does not need (and probably won't be) stated in the lease. You should, of course, check with an attorney on this, but I bet that's what you'll be told.
posted by merejane at 6:04 PM on August 19, 2005

I suggest reaching a negotiated settlement with the landlord. Which is to say, possibly trying to find someone to take the lease, possibly paying a small amount (maybe as much as one month's rent) for breaking it, whatever you both agree on and are happy with.

I absolutely wouldn't pay the guy any sort of large cash settlement. Reality is that the landlord is NOT going to tell on you to your mommy, not going to sue you, not going to do anything at all unless you've devastated the place, which I assume you haven't. Lawsuits are expensive. They're going to re-rent the apartment, likely for more than you're paying and likely quite soon after you've left. Unless you tell them or leave a forwarding address, the landlord won't even know where you'll be living, which is a pre-requisite to suing you...

In NYC at least, it's standard for landlords to simply keep your security deposit when you leave (even at lease expiration and leaving behind a pristine apartment). This is illegal. However, it will cost you more than the deposit to sue the landlord and get it back. So you're screwed - it costs $2000 to get $1500 back, or whatever. This is *standard*. Smart tenants therefore never pay the last month's rent, letting the deposit take its place. And so the little game goes, back and forth...

Anyway, if I were you, I would think of the "two months' rent plus rent for the rest of the lease" as the landlord's opening gambit in a negotiation where YOU, not they, have just about all of the power - you have the money, and it will cost them thousands to try to get any of it from you via the courts. Possession (of your money) is 9/10th of the law... I advocate dealing fairly with landlords, but not letting yourself be taken by them.
posted by jellicle at 8:26 PM on August 19, 2005