If you can’t pay rent or are unable to continue living in a rental property for other reasons, you might be tempted to simply walk away from the property and stop paying. Especially if you’re having a financial hardship and eviction is a possibility, you might think “If I’m going to be evicted anyway, why not just walk away now?”
You can learn how to get out of a rental lease early without walking away and mitigate the risks of breaking your lease agreement.
What to Consider Before Leaving a Rental Lease Early
Does not paying rent affect your credit score?
Unpaid rent could become a court judgment if your landlord sues. This judgment is a strong negative mark on your credit report that could affect your ability to get credit, a job, a new place to live, and much more. Avoid getting these kinds of negative “public record” notations on your credit, as they last 7 years at a minimum.
On top of the judgment, you could end up with a collection agency coming after you for the unpaid rent, and they will certainly put a negative notation on your credit report as they seek to collect the unpaid debt.
It’s also common for renters to begin paying their rent with credit as their financial situation gets worse. This is never a good idea, and leads to worse credit due to its impact on one’s utilization rate. We urge people never to use credit as a substitute for income, even when facing potential eviction—talk to a counselor as soon as you can, rather than waiting until your financial situation is hopeless.
We want people to take care to protect and improve their credit whenever possible, and walking away from a rental lease is a sure-fire way to damage that all-important credit report & score.
Will Leaving Your Lease Be Expensive?
While walking away from the lease could save you money in rent payments in the long term, it might come with steep up-front costs. Your rental agreement will include clauses with the consequences of breaking the lease—there will be a potential termination fee, or you might be required to keep paying rent until the landlord finds a new tenant.
On top of the termination clauses, you could end up in court, or in collections, or both. Defending yourself in court is costly, and collection agencies may add collection fees to the amount you owe.
Walking away from a lease prematurely doesn’t cut off the charges you have to pay right away—it triggers additional charges that come as a punishment for breaking your lease. You’ll also probably lose your security deposit as well.
You Might Be Giving Up Your Rights if you Leave Your Lease Early
If you walk away without taking all the proper legal steps to break your lease, you might be giving up some of your rights. Even if you simply can’t pay rent any more, you should still talk to a HUD-certified housing counselor about what you should do before simply walking away. There may be relief programs for renters from the Federal or local governments, but you have to make sure you do everything in the proper way so you are eligible for any relief programs that are implemented.
Your lease or rental agreement might specify how much notice you need to give your landlord to avoid extra fees. By properly following the agreement and giving plenty of advance notice, you are protecting yourself from some of the consequences of breaking your lease early.
Will You Have Trouble Renting Again?
Does breaking a lease hurt your rental history? It can! The next time you try to rent after walking away from a lease, your landlord will have access to your credit history as well as reports from tenant screening services. Any background check performed by your landlord will uncover your previous rental situations and whether you paid the full lease as agreed. If potential landlords see that you broke your lease or walked away before negotiating an early termination, they will probably refuse to rent to you and/or require a large deposit.
If You Must Leave Your Rental Lease Early
Work with Your Landlord
Try not to create an adversarial relationship if you can avoid it. Communicate with your landlord and let them know what’s going on. If you’ve had financial setbacks or illness that are affecting your ability to pay your rent. Talk to them about it. They may be willing to let you amend the lease and get out early without any termination fees or negative credit consequences.
Depending on what happens with Federal and local legislation, there may be some rental relief for landlords who work with their tenants to avoid eviction. Your landlord needs to know your circumstances if this kind of relief is going to be a realistic option for you.
You might be able to help your landlord if you find someone to take over your lease. If you have a new tenant lined up for them and there will be no interruption for them to deal with, they might be more willing to cooperate and let you end the lease early.
Get Counseling from a HUD Approved Agency
Find a HUD-approved housing counseling agency and talk to a counselor about your situation. This person can help you figure out what to do if you can’t pay rent and will be up to date on your rights as a renter, as well as national and regional programs to help people avoid eviction.
A housing counselor should be able to help you create a plan of action to negotiate with your landlord to adjust your lease or terminate it early.
Besides knowing your rights, a housing counselor will help you know your obligations—what things you need to document, what information you should share, and what mistakes to avoid as you work to get out of a rental lease.
Document Everything About Your Rental Lease
Speaking of documentation, keep records. Everything you’ve received or signed with regard to your rental is important. If you are facing potential eviction, save any emails or text messages you get, and create a record of any phone calls you have with your landlord.
If you haven’t read the entire rental agreement, be sure you do so. Find out what the exact terms are for what happens if you leave before your lease is up, and whether additional fees will be triggered. If anything is unclear, talk to your housing counselor about your options.
Explain Why You Are Leaving Your Lease
Some reasons to leave a rental lease are more defensible than others, and might change your response. The things you need to document are probably going to change based on these reasons. And with some circumstances, the law will be on your side and allow you to break a lease early without penalty:
- Military members who are reassigned or deployed to another locale
- Victims of domestic abuse
- Tenants with a serious health issue
- Tenants where the property is uninhabitable
- Tenants whose landlords have violated the rental agreement
Those last two options will require extra documentation to prove, and you may end up needing legal advice. Please be aware that nothing in this article or on our website constitutes legal advice. Always seek the services of a qualified attorney if you need legal advice or representation.
Also remember that consumer laws vary from state to state, and even from city to city. Find out what your local laws are and protect yourself and your rights as you negotiate to end your rental lease with the least amount of damage to your finances and your credit.
Also remember the Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on race, color, national origin, religion, sex, familial status, and disability.
Besides HUD-approved housing counseling, credit.org offers debt coaching that can help you create a plan to be debt free. If you’re concerned about making your rent every month, talk to an expert about paying down your debt and freeing up income to keep a roof over your head.