A lease is a legally binding agreement between a tenant and landlord. It outlines the main lease terms, which include things like an early termination clause and the lease end date. When a tenant signs a lease, it is believed that they have good intentions and plan to occupy the apartment or home until the fixed term lease expires.
With that said, sometimes things happen that might force you to break your lease. For instance, you might move home to take care of a close family member, join the military, or get a new job elsewhere.
Several reasons might force you to move sooner than expected and break your lease. Since the lease is legally binding, if the tenant breaks it, there might be undesirable consequences.
Here, we focus on steps you might take to mitigate the potential consequences of breaking your lease.
How to Break a Lease Without Penalty
Let’s consider how you can legally break the lease agreement without consequences under Michigan law:
Tenant Responsibilities and Rights while Signing a Lease
A lease agreement obligates both you and your landlord for a certain period, typically one year.
Under a normal lease, a landlord isn’t allowed to charge extra rent or bring up other terms until the lease runs out. A landlord can only change the terms within the lease period if the lease provides for it.
A landlord cannot force you out of the apartment before the lease expires unless you violate a significant term, such as throwing noisy parties or failing to pay rent. In such cases, a landlord or property manager in Michigan should follow certain procedures to end the tenancy.
For instance, the landlord has to serve you with a 7-days written notice to either pay rent or leave their unit. However, a tenant is allowed to challenge the move in court.
As a tenant, you’re bound to pay the agreed rent throughout the remaining lease term, no matter if you continue to live in the rental unit or not.
Check the Lease for an Early Termination Clause
Even before starting the lease-breaking process, you need to understand your rights. Most rental agreements outline the valid procedures and reasons for breaking your rental lease in a separate clause.
For instance, contracts might let you get out of your lease agreement under special life-changing events and circumstances, such as the death of a spouse or divorce.
Some contracts have a rent-responsible clause, which implies that a tenant is responsible for paying their monthly rent until the property manager finds another tenant.
State law, such as Michigan law, requires the property manager to make reasonable efforts to re-rent the unit rather than charge tenants for the remaining rent under the lease. It’s, therefore, your responsibility to ensure your landlord is putting in enough effort, as prescribed by the local legislation.
Another critical stipulation is the buy-out clause, which requires a tenant to pay extra rent payments or a certain fee. You’ll have to provide a proper written notice of intent to vacate the unit in such a case.
Evaluating the Consequences of Early Termination
Before we focus on the specifics of lease termination, we need to warn you that breaking it presents certain consequences, especially if you lack the legal justification to do so.
Some possible ramifications include:
If you stop paying rent or break a lease agreement, the landlord might decide to take you to court. They can file a lawsuit to have you pay the lease rent balance. If the judge makes a ruling against you, you’ll have to pay the balance.
Lowered Credit Score
If the judge makes a ruling that you’ve broken your lease agreement, they could issue a credit judgement, which is an order to have you pay your debt. The judgement will show up as a public record separate from your credit score on your credit report.
You can avoid this judgement by agreeing on payment with the property manager or repaying your debt. If the judge finds you guilty of breaking a lease without any legal cause, it can harm your credit score.
The judgment can remain on your credit report for up to 7–years. Therefore, you must pay all the rent owed to your landlord.
Difficulty in Renting a New Unit or Getting a Loan
If you break a lease, you might experience a decrease in credit score of up to 50 points. This will affect your ability to get a loan for a down payment, or even secure a new rental apartment.
Most landlords and property managers will require you to provide references from previous landlords. Breaking a lease will prevent you from getting a stellar recommendation.
Determining if You Have Legal Reasons to Break Your Lease
A lease outlines the consequences and process of breaking it, in most cases. However, there are cases where you can break the lease without consequences:
Illegal Rental Unit
Some property managers convert basements, commercial structures, or garages into rental units. In some states, including Michigan, breaking a lease is legal if you had no prior knowledge of the rental illegality.
You might get a portion or all of the rent you have paid back in such a case. It’s, therefore, critical that you understand your local legislation relating to illegal rental units.
Inability to Maintain Habitable Housing, Lack of Compliance with Local Health and Safety Codes, or Constructive Eviction
We recognize that every tenant deserves to get the best housing conditions.
When you rent an apartment, you’re entitled to a safe environment. The landlord is responsible for ensuring that their apartment is habitable.
Every state law has their health and safety codes that all rentals need to comply with to be habitable. For instance, an apartment should have trash bins, stable walls, a roof over your head, running water, plumbing, and heat.
If a landlord fails to offer habitable housing, as per the local and state housing codes, a court of law can conclude that you’ve been “constructively evicted.” If the landlord violates Michigan health codes, you have the right to break your residential lease.
With that said, a small roof leak that is repairable isn’t enough reason to break your lease early. The issue should be big enough to threaten your safety and health.
Roof Leak Results in Mildew or Mold
You must inform the landlord or property manager of the problem before you break the lease. Give them enough time to see if they’ll fix the problem.
Contact the relevant local housing authorities if the landlord fails to correct the issue.
Landlord Repeatedly Violates Tenant’s Right to Privacy
According to most state legislation, the landlord or property manager is required to give tenants at least a 24-hour written notice before they visit the property.
They should also give a good reason behind the visit, it doesn’t matter whether they own the property or it’s subsidized senior citizen housing. As long as there is a legal agreement bounding the tenant and the landlord, a tenant’s permission to enter is necessary because they are entitled to some privacy.
With that said, a property manager or landlord can visit the rental property to inspect potential issues or do repairs. They can also enter the unit to show it to potential tenants.
You’re allowed to go to the small claims court if your landlord keeps making unannounced visits. After getting a court order, you can then initiate the early lease termination process.
If a landlord violates the tenant’s privacy, they are considered “constructively evicted.”
Active Military Duty
If you enter active military service after signing a lease, you’re allowed to break it under federal law.
You are protected under the SCRA (Servicemembers Civil Relief Act) if you’re a member of National Oceanic and Atmospheric Administration, a commissioned officer of the Public Health Service, a member of the National Guard for at least 30 days, or a full-time member of the military (Air Force, Coast Guard, Navy, Army, or Marine Corps).
The SCRA will also cover your family. This means that your spouse won’t be responsible for the lease agreement, even if their name appears on the contract. If you want to execute your rights, you must provide your landlord with proper notice of intent to vacate.
You can send the letter by certified mail or deliver it yourself. Always remember to attach a copy of your orders.
The lease will be terminated either on the last day of the month, following the month that you delivered the notice, or after the next day your rent is due, depending on whether your lease is a fixed term lease or a month-to-month rental agreement.
If you make an early termination, your security deposit won’t be withheld as a punitive action.
Sexual Assault, Stalking, Landlord Harassment, or Domestic Violence
In most states, sexual harassment and domestic violence victims are allowed to terminate their lease early. However, the victims need to inform the landlord or property manager of a threat of future domestic violence in the rental unit.
You should inform the landlord of any domestic violence cases in writing. The rental unit, in this case, is defined widely and may involve hallways, inside the apartment, laundry room, parking lot, yard, gym, back and front of the unit. After the incident, you can send the notice to vacate.
With that said, remember the rules for this notice vary from one state to another.
For some states, the period is within 90-days after the auction. You also need to accompany the notice with documents proving your allegations. This could be in the form of the tenant securing a personal protection order, court order, police report, medical record, etc.
The landlord can sue the ‘adverse party’ if they face monetary damages due to the termination. This party is the alleged perpetrator of harassment, stalking, domestic violence, or sexual assault.
The property manager or landlord isn’t allowed to withhold the deposit as punishment. Refer to your state’s legislation to get guidance on your specific situation.
Getting Out of the Lease with Minimal Losses if You Can’t Legally Break It
Surrender the Security Deposit as Compensation
You need to understand that breaking the lease forces your landlord into a significant financial loss. The best approach when you find yourself in a situation that compels you to break the lease would be to compromise with the landlord.
You can offer the landlord your security deposit as compensation for potential losses or inconveniences caused by breaking the lease. Remember that if there is damage to the rental unit, the landlord will keep the deposit anyway. Therefore, it would be best if you took care of all the painting and repairs needed prior to vacating.
You need to check whether your lease allows subletting. You should talk to the landlord or property manager if it doesn’t.
With that said, you should take care of the advertising costs to find a new tenant. In such a case, it isn’t the landlord’s duty to find another tenant.
You’ll also be responsible for collecting rent from the new tenant and delivering it to the landlord.
Appeal to the Landlord’s Better Nature
Here, you need to talk to the property manager and explain to them your situation. Property managers are humans, too, and they’re likely to understand your situation.
Even though we’ve compiled a list of the common approaches to break a lease agreement without a penalty, every case is unique and details matter. We encourage you to go through your lease carefully and check out the local landlord-tenant laws.
If you lack options, talk to your landlord and explain your situation as a last resort. Also, always seek legal advice before breaking a lease.