Breaking a Lease on a Rental Agreement Most rental agreements have a section regarding the renter breaking t he lease agreement. While there is also likely a section or several s ections regarding when the leasing agent can evict the renter, the se ction on breaking the lease should be of particular interest to those who might be in a position to have to break the lease some day. Rent ers should understand these contract terms so they can make an inform ed decision. Additionally the renter should consider all costs associ ated with breaking the lease. This includes both financial costs as w ell as emotional costs. Understand the Contract Terms Renters should review their rental agreement carefully before signin g this document. The rental agreement is a legally binding document which should be given proper consideration before entering into the agreement. This is important because understanding these terms will be essential if the need to break the lease becomes a reality. Rental agreements typically do allow the renter to break the lease b ut not without some form of penalty. This penalty usually comes in t he 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 l ease break amount equal to one month’s rent are common penalties ass ociated with breaking a lease, however, individual leasing agents ma y impose penalties which are either harsher or less severe. Consider the Costs of Breaking the Lease As previously mentioned there is typically a fee associated with brea king a lease. This fee is often set equal to one month’s rent. While paying this fee may seem excessive there are some instances 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 homeowner who is the process or relocating due to a job change. The homeowner may opt to rent an apartment in th e new state while the house is put up for sale in the previous state. If the renter enters into a 12 month contract under the supposition that it will take this long to sell the old house and purchase a new house, he may be surprised if his other house sells quickly and he fi nds a home in his new state rather quickly. This may all occur within a matter of 2-3 months. The renter has the option to stay in the apartment until the rental ag reement nears expiration and then start looking for a home. However, t his option runs the risk that the home he previously found will not li kely be available. The renters other option is to place a bid on the n
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ew house and plan on breaking 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 than the price the renter would pay to break the lease. Breaking the Lease is Not Always a Financial Decision The decision to break a lease is not always completely a financial d ecision. There are sometimes emotional components which factor into the equation. For example a renter may have only 1-2 months remainin g on his rental agreement when he is offered a dream job which will require him to relocate immediately. Although breaking the lease tha t late in the agreement is usually not financially wise, the renter may make this decision to avoid missing out on a dream job. PPPPP Word count 603