The Real.Est List
Best of Brick: How to break a lease
(Originally posted on 12/13/2010)
Sooner or later, most renters experience the need or desire to prematurely break up with an apartment.
Breaking your lease may be no problem if your employer is paying relo expenses that cover the balance of the rent due, or if you don’t mind forking over the balance yourself.
But if you hope to end your financial responsibilities when you turn in the keys, remember this: “Basically, your lease is a contract, and you have to start from the position that you’re obligated,” says Steven Wagner, a real estate attorney at Wagner Davis in Manhattan. “You have to find some reason to have the landlord agree to let you out or find something the landlord has done to breach the agreement.”
Your legal options
The biggest mistake renters make in New York is assuming that the landlord has the responsibility to try to re-rent the apartment (i.e. “mitigate” damages) if the tenant walks before the lease is over, says Wagner.
This didn’t always used to be the case in New York. The law changed back in 2008, says Wagner, giving landlords a "huge advantage" in these situations.
However, the law does provide a couple of exceptions:
1) Find another tenant: No matter what your lease says about it, New York law provides that if you offer up another, qualified tenant, the landlord must assign the lease to that tenant and/or release you from your responsibilities within 30 days, or give a reasonable explanation for turning down the proposed tenant.
(You have a similar right to sublet if you live in a building with at least four apartments. If the landlord doesn’t respond to your request within 30 days--or within 30 days of receiving any additional information the landlord wants about the potential subletee--then the law interprets this as consent.)
The trick is finding a “qualified” tenant.
“A landlord is allowed to reasonably withhold consent, and they have to give a valid reason or reasonable basis for the refusal,” explains Wagner. “What is reasonable will depend on the particular facts and circumstances, including financial responsibility, the legality of the proposed use, and the nature of the occupancy—for example, if the new tenant wants to use the apartment as a psychiatrist’s office, that could be a reasonable basis for refusal.”
2) Constructive eviction If you are leaving your apartment because there are problems with it—mold, bed bugs, lead paint, construction noise, etc.—then you may have a case for constructive eviction, in which you allege that the landlord has failed to uphold thewarranty of habitability conferred by New York law on all rental apartments.
To claim constructive eviction, you must move out first. “This is risky business because if you are wrong, you have to pay the rent,” says Wagner.
Thus, before you move, it is wise to stick around and document the problems.
“Call 311 and have the Housing Preservation Department or the Department of Buildings come in,” says Wagner. “If they issue violations, that is objective proof of conditions.”
In addition, you can take photos, send letters to the landlord, and call in experts to confirm the existence of mold, asbestos, secondhand smoke, etc. If possible, get a Certified Industrial Hygienist (a “CIH”) to do the testing. "A CIH has the highest credentials to do the testing," says Wagner.
Tactically speaking, the violations alone may be enough to pressure your landlord to let you out of the lease. If you proceed further and go to housing court, you may win, but you will almost certainly have trouble ever renting again in New York City (and possibly being approved by a co-op board).
“A landlord-tenant court history is the ‘scarlet letter’ of renting in Manhattan,” observes Gus Waite, a longtime rental agent and a managing director at BondNY Real Estate. “It is almost impossible to rent in NYC if you have a landlord-tenant court history, whether you won or not.”
Guerilla tactics & other strategies
So much for your options provided by law. Here are some other things to try, ranging from upfront to lower down.
1) Ask to be let out “Send a registered letter to your landlord explaining why you need to break your lease,” advises Waite. “Ask them for any suggestions they might have that would allow you to get out of the lease. They may keep you on the hook until they re-rent it, they may ask you to find a qualified tenant, or they may let you out with a penalty—anywhere from two or three months rent on up.”
Market conditions play a big role here: In a brisk rental market where the landlord expects to re-rent quickly, a penalty could add up to a nice profit. (The dead of winter is typically a tougher time to negotiate an exit; if you can, wait until summer.) Alternatively, if your apartment is rent stabilized and you’ve been there at least a year, your landlord may welcome the opportunity to get a so-called “vacancy increase” if available, or to make apartment improvements in order to increase the legal rent by 1/40th of the cost of the improvement.
2) Be annoying While this can be a somewhat morally dubious way to get what you want, the fact is that the more annoying you are, the more likely your landlord will want you to make a hasty exit.
“The misery you can cause starts with putting violations on the building,” says Wagner. “There’s always something wrong with the building even if not in your apartment.”
Among the places to look:
- The façade of the building, if it’s six stories or more. If there’s anything weird such as bulges, cracks, loose mortar, or concrete or bricks that is popping off, call it in to the Department of Buildings as a potentially hazardous condition.
- Does black smoke come out of the building every time the boiler is on? Call it in.
- If you live in a loft building, check the Department of Buildings website to see if there is a Certificate of Occupancy permitting residential use.
- Check the Department of Buildings website to see if there are any outstanding violations in your building. Call the city again and alert them to the fact that they have not taken care of violations.
- If you rent a non-stabilized apartment, determine whether the apartment has been illegally destabilized to reach its current market rent. Start by visiting your local office of the NYS Homes & Community Renewal to get a printout of the regulated rent history of your apartment. They can also help you determine whether the current rent is legal. “If the landlord overcharged you intentionally, you may entitled to treble damages,” says Wagner. “The landlord may wind up paying you a lot of money and letting you out of your lease.”
- Oil in the basement or an oil smell may indicate a leak, which can result in violations and big fines
- For more potential violations, check out the Housing Maintenance Code.
3) Swap apartments If you just can’t afford your apartment anymore—or you’re looking for a bigger one—check with your landlord to see if you can make a switch to another owned by the landlord.
“Some management companies, like Equity Residential, will allow you to break the lease if you are moving to one of their other properties,” says Waite.
And if you want to move up, landlords are typically “thrilled and delighted,” says Wagner.
The trick here, as in every situation that ends with you walking away early, is to get your landlord to sign a “surrender agreement” containing language that legally releases you from the lease, says Wagner.
4) Pick your moment Just as landlords will be more likely to let you go during a hot rental market, their grip on you may relax the closer you are to the end of your lease term. Hence, when you sign your lease to begin with and you think there’s a possibility you may need to move, it’s better to take a one-year lease with an option for a second.
In rare cases, a landlord may even be willing to put in a clause allowing you to terminate with 60 days notice.
“It’s not typical, but if you’re paying a lot of money for a lease and they’re really happy to have you, they might," says Wagner.