What Can They Do To Us If We Break Our Michigan Lease?
September 12, 2011 11:45 AM   Subscribe

Help us figure out the risks and ramifications of breaking our lease in Ann Arbor, MI.

Three months after we moved into our new apartment, we've concluded that it's a dump and that we need to leave.

We rented the place after having a friend scout it out for us, and it seemed to be the best thing available at the time. There's nothing we can legally demand the landlord fix- it's just a rather shoddy apartment in a market dominated by student rentals. Our standards aren't high, but there's certain stuff that's not just aesthetic- for example, for structural reasons the place is going to be impossible to heat during winter and the landlord is not interested in replacing the window frames or installing double-pane windows.

I've read the lease over carefully, and it appears that there are no specific provisions or punishments spelled out for breaking the lease. Nothing about early termination fees or forfeiting our deposit. All it says besides stuff like no pets, deposit policy etc. is that we have committed to pay rent for one year.

Michigan's rental law doesn't say anything about what landlords can legally do or not do to you if you break a lease (withhold your deposit? Report you to the credit rating agencies?). The Michigan tenant's rights websites that I've found (example here and here) say only that you're responsible for rent until someone is found who will rent the place, and that it's therefore in your best interest to help the landlord find someone to rent the place. We are happy to do this and due to the tight market are fairly confident we can find a new renter.

Here's the trouble: we'd been mulling this over for a while, but just happened to stumble upon a place that's nice and well-maintained and basically so much better that our current apartment. We are going to need to commit to it by the end of the week. After reading this post about a different situation, I went ahead and got a referral from the local bar association ($30 for 30 minutes with a real estate lawyer), but he can't see us until next week. There does not appear to be a local tenant's rights organization that offers on-the-spot counseling.

We need to make a move if we're going to get this new place. This means we have to stick our necks out now and sound out our current landlord about leaving. I've like to get a sense of what our risks and responsibilities are and what they can or can't do, especially if there's nothing spelled out in the lease.

Note: the new place won't be available until Dec. 1 so we have plenty of time to find a new tenant for our place. I intend to use this as leverage with the landlord so that we can "generously" offer to pay rent for October and November.

I know none of you are my lawyer or my Michigan lawyer specializing in real estate, but I'd appreciate any thoughts based on knowledge or experience. There are some other related AskMe posts on the subject, but nothing that directly answers our questions.
posted by foxy_hedgehog to Law & Government (8 answers total) 1 user marked this as a favorite
Can you call back the bar association for a second referral? they often just refer down a list in alphabetical order or similar -- no favoritism in referrals -- so call back and say, "this is time-sensitive, I appreciate the referral, but I need someone who can talk to me this week." They should give you the next name on the list. Or, if you get a sympathetic bar association secretary, she may pick out a youngun without a lot of business yet who can see you faster.
posted by Eyebrows McGee at 11:50 AM on September 12, 2011

Response by poster: Thanks, Eyebrows- I actually explained that we were under the gun, but she apparently all the lawyers they work with book 5-7 days out for appointments. We called the number of the lawyer they gave us but they still haven't called us back. If I don't hear by tomorrow I'm going to ask for another name (we already plunked down the $30), but there's just no guarantee anyone can see us.
posted by foxy_hedgehog at 12:00 PM on September 12, 2011

Check out this document from a2gov.org. It covers a lot of rights/responsibilities stuff, and specifically mentions subletting, which is the obvious solution to your problem if you know someone who will take over the apartment. You're still (legally) liable for the rent, so get a sublessor who's trustworthy.
posted by axiom at 12:31 PM on September 12, 2011

The Michigan tenant's rights websites say only. . .

Rather than simply reading their website, why don't you call the Michigan Tenant Counseling Program and ask them for advice?

It seems they are the successor organization to the old AA Tenants Union. I went to the AATU once years ago and they were very helpful. The main thing they told me was that the piece of paper I'd signed with my landlord didn't count as a lease at all. That was not good news for me at the time, but the same info might be good news in your case.

They should be able to help you walk through the various options and scenarios.
posted by Herodios at 12:40 PM on September 12, 2011

Response by poster: Axion: thanks for the link- we'd prefer to reassign the lease rather than sublet so we're not perpetually anxious about whether the subletter will pony up or not.

Herodios, I have a call and an email in to the Michigan Tenant Counseling program- I just haven't heard back. Hoping they'll come through.
posted by foxy_hedgehog at 12:51 PM on September 12, 2011

IANAMichiganL/IANYL Landlord/Tenant law is obviously very state specific, and the advice to contact a tenant organization is your best bet. What you should keep in mind, though, is even if your lease doesn't have a specified termination fee, you agreed "to pay rent for one year." Even if you move out, that obligation may still exist. The landlord may be required to mitigate and re-rent the apartment, but you could be required to pay rent even if you are no longer living there.

Practically speaking, it's probably not worth your landlord's time and effort to sue you for the remainder of the year's rent. Is the deposit you gave them last month's rent or a security deposit? Or both? Some states say that security deposits can't be put towards unpaid rent. But if it's last month's rent then they can probably keep that.
posted by Bresciabouvier at 1:15 PM on September 12, 2011

Best answer: Landlord speaking, not in Michigan, not a lawyer.

What your landlord CAN do to you is pretty much standard and limited. They can, if they so desire, take you to court for the balance of the lease (it sounds like you'll have six or seven months left). In pretty much every jurisdiction they will have to show that they have tried to mitigate their loss by trying to re-rent the place, and if someone takes it, you're only liable for the months it was empty (in addition to any in which you still occupied it). If they win in court, they get a judgement against you, and that can be reported to credit agencies and given to collection agencies to pursue you for repayment.

But what they CAN do and what they WILL do are often two different things. A small-time landlord is probably not going to want to go to court unless it's a big chunk of change. It's a huge hassle, maybe a once every couple of years thing, and it can cost attorney's fees or at least his time if he goes pro se. By the same token a big landlording operation with an attorney on permanent retainer who spends a lot of time in housing court might have some slavish pursuit policies.

But in a place like Ann Arbor, with a lot of very mobile students, the bottom line is going to be how long it's empty. If you can get someone to move in right after you leave, even a month after you leave, the amount of money and hassle will probably not be worth it to them.

The strategy is to present yourselves as making their lives easier. Start strong: just ask if you can break your lease. It is really, really common for landlords to just accept reality and let you out. Since you're saying it's a crappy dump, they didn't move heaven and earth to get this place rented. So start by just asking.

If you need to sweeten the pot, because they get ticked off at you or something, you could consider a buy-out offer, where you get an agreement in writing terminating your lease in return for, say, an extra half-month's rent. In my pragmatic opinion, having dealt with lots of move-outs where it hasn't been worth the hassle to go to court, almost anything you draw up will probably be fine as long as both parties sign it -- but I'm not a lawyer and it wouldn't hurt to have one look over the agreement. Mainly, you want it to say that your lease is terminated by mutual agreement as of Dec. 1, and you are released from further obligations from that date.

Some landlording books and form kits include buy-out forms as a matter of course. They're not necessarily common -- I think oral agreements are more typical -- but they shouldn't throw the landlord for a loop, either, unless they're completely new to the game.
posted by dhartung at 1:24 PM on September 12, 2011 [1 favorite]

Response by poster: dhartung, thanks for your perspective. I think you're absolutely right and the only way to know what the landlord will or will not do is to broach the subject politely and see how they respond. I appreciate your help.
posted by foxy_hedgehog at 6:01 AM on September 13, 2011

« Older How to co-parent effectively?   |   Prospective Employer Asking for Social Security #... Newer »
This thread is closed to new comments.