Lease penalties are the fees that must be paid when one vacates a rental before the end of their lease. Lease agreements are usually for a specified term — perhaps one month, six months, nine months or a year.
Anytime the lease is ended before the specified term is up, there will likely be a penalty. The amount required for lease penalties is usually set out in the lease agreement.
1. Lease penalties can be avoided
Lease penalties can be avoided. The most straightforward way to avoid a lease penalty is to complete the entire term that’s required in the lease. Beyond that obvious choice, you may be able to avoid the penalty by subletting your unit for the remainder of your lease period. In a sublet arrangement, a short-term tenant occupies your unit in your place for the remainder of your lease term under an agreement called a “sublease.”
2. Lease penalties are sometimes quite high
Lease penalties can be for a rather high amount in some cases. However, some state laws do have caps or rules regarding maximum allowable lease penalties. Many lease agreements require tenants to pay the amount of rent for the remaining months in the lease to end the agreement early. Other lease agreements may require a specific percentage of the remaining rent. Lease agreements will often even have two separate amounts and require either the higher or lower of the two, depending on how much of the lease was actually completed. It’s all up to the property owner’s discretion.
3. There may still be a way to get out of your lease early
The only way that you can get out of a lease early, without paying a required penalty, is if the property owner lets you out of the agreement. Check your lease to see if there are any situations that would allow you to leave early. And when all else fails, simply ask. You never know how the property owner will respond.
Make sure you know of all possible lease penalties
The best way to handle lease penalties is to know what to expect. The best time to learn about lease penalties is before signing the agreement. If you’re planning on ending an existing lease early, read the agreement to see what kind of penalty you should anticipate.