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How to break a lease on a NYC apartment

By Emily Myers | June 6, 2022 - 9:30AM

Breaking a lease can sometimes cost you, depending on market conditions and whether you can find a tenant to replace you.

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Signing a lease for a New York City rental is typically a cause of celebration. You found a place! You can’t get kicked out! But with every commitment comes responsibility and in this city, a lease usually comes with a hefty financial one: When you sign a lease you are legally bound to pay rent for the entire length of the lease term. This is usually 12 months but can be longer. 

However, if you need to leave your apartment before the end of your lease, you can’t just walk away without taking a financial hit. 

"Basically, your lease is a contract to pay rent for the full 12- or 24-month period, and you have to start from the position that you’re obligated to pay," says New York City real estate attorney Steven Wagner, (a Brick Underground sponsor) and partner at Adam Leitman Bailey, P.C. 

A lesson learned by many during the height of the pandemic was that if you want to get out of your lease, it might not be as easy as you hoped. The good news is that a landlord has what’s called a duty to mitigate damages—this means they have to do all they can to find another tenant at the same rent or market rent, whichever is lower. They can choose to increase the rent if it’s a really competitive market but by doing so it lets you—the original tenant—off the hook. 

"Even though landlords are required to mitigate damages by re-renting, you could still be on the hook for the entirety of the lease. You either 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," he says.


[Editor’s note: An earlier version of this story ran in June 2021. We are presenting it again here with updated information for June 2022]


The law is intended to have renters and landlords on the same page, equally incentivizing both parties to find a new tenant who meets the building’s income requirements and can take over the lease of the apartment. Here’s what to know about breaking your lease—and how to do it.

Ask to be released (in writing)

As soon as you know you want to get out of your lease, notify your landlord or management company in writing—a letter sent by registered mail is the most formal method but you should check your lease and find out how you should communicate with your landlord. In the letter, you’ll want to explain your situation. Be upfront and transparent, and find out what your options are. 

"Some landlords will act reasonably, so always approach them first. They may ask you to find a replacement, or to give them regular access to the apartment so they can market it and show it to prospective tenants themselves,” says Sam Himmelstein, a tenant attorney and partner at the Manhattan law firm Himmelstein, McConnell, Gribben, & Joseph LLP (and also a Brick sponsor).

While ending a lease early is pretty common, and there is no standardized policy on lease breaks, most larger landlords will have some kind of general rule and process. Smaller, independent landlords tend to respond more on a case-by-case basis.

“Big landlords all have a process because they’ve been asked to do it a thousand times,” says Phil Horigan, founder of Leasebreak, a free listing site for short term rentals and lease breaks. “They’ll say, ‘Sure, we allow it. And there’s a very specific way to do it.’” 

“Allow” does not mean “don’t worry about the rent you’re contractually obligated to pay.” But as long as there’s no lost rent, you may be fine, says Rory Bolger, a broker at Brown Harris Stevens. For instance, a larger-scale landlord may have a renter that needs relocating or upsizing or even another apartment with dates and terms that suit your needs. (Pro tip: Some management companies will let you break the lease penalty-free if you're moving into another building in their network.)

Gus Waite, managing broker at Station Cities, advises asking your landlord “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.”

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, Wagner says.

Find another tenant 

So you know someone who wants to move into your place when you want to leave? Problem solved, right? Maybe not. In fact, probably not. 

Most landlords will want to approve the new person moving into their building, and that doesn’t mean they have to think they’re nice people: Renters need to meet the financial criteria of the landlord and pass whatever other screening processes are in place.

Requirements typically include earning an annual income 40 to 45 times the monthly rent, a clean credit history, as well as proof of employment. 

“A landlord is allowed to reasonably withhold consent, and they have to give a valid reason or reasonable basis for the refusal,” Wagner says. “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.”

The Met Council on Housing, a NYC tenant’s rights organization, has a guide to what constitutes a reasonable or unreasonable refusal. Their site also outlines that you have the right to suggest another qualified tenant take your place if you intend to leave your apartment permanently. 

This is called “an assignment,” and the landlord can assign the lease to the new tenant and will typically release you from your responsibilities. The landlord must act within 30 days. If the assignment is denied, the landlord must 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 sub-letter—then by default, they’ve given consent. 

However, Himmelstein points out with a sublet, you are still responsible for all the obligations of the lease, including the rent. “And if the landlord reasonably refuses to consent—and it is often not clear what that looks like—the tenant cannot proceed with the subletting. If the landlord unreasonably refuses to consent to the sublet, then [you] can proceed with the subletting, but the landlord might challenge it in court,” he says. 

Horigan points out, when there is competition for rentals, a 30-day timeframe isn’t very practical. “There are few—if any—renters that can wait 30 days for a landlord to make a decision,” he says. So if you don’t get a response, he recommends following up with the property owner or leasing agent and trying to work with them to achieve the outcome you want.

In the past 12 months, landlords have become stingy with concessions but if you were offered one or two months free, this perk is unlikely to be offered to the incoming tenant. If the free months are at the end of your lease term, you will probably have to forfeit them when trying to re-rent the apartment. 

One caveat here: The right to assign your lease doesn't apply if you’re renting in a co-op or condo building, but in these cases, you are frequently dealing with individual owners who don't want to get attorneys involved and are inclined to be reasonable. However, boards have their own rules and may refuse to let the owner re-rent to a new tenant for a lease shorter than 12 months or they may have a requirement that the owner can only have one tenant per 12 month period. This can often be worked out, but it’s worth checking in advance. 

Avoid breaking your lease in winter, if possible

The slowest seasonal time for rentals is November through February or March so if you need to break your lease, it’s more complicated to do it in the winter. You and your landlord will find it easier to get a replacement tenant in the summer. Horigan says rents can be anywhere from 10 to 30 percent lower in winter and the landlord may have to offer more concessions in order to fill the place. 

“Generally in an environment when rent prices are increasing it is a better time to break your lease because landlords are incentivized to get new tenants sooner at higher prices,” Horigan says. 

That said, it may also depend on how many similar units the landlord is trying to rent. Bolger says sometimes adding another unit to the market is costly for the landlord:  “If a building has five one-bedrooms units available for the month of July and you are going to throw another one in the mix, that doesn’t help the landlord at all,” he says. 

On the flip side, if your lease ends in the slower winter months and you are looking to break it in the summer, a landlord might appreciate it if you can find a new 12-month renter with a summer start, when prices are much higher. “The smaller landlords are not always thinking about this and it can help get the landlord to work with you,” Horigan says.  

Note that most people start looking for a place to rent 60 days in advance and up to 90 days on full-service luxury apartments. “The best starting place is to have the apartment marketed 60 days in advance of a lease break,” Bolger says.  

Your security deposit is (technically) safe

A landlord must do whatever they can to help you find another tenant if you want to break your lease. This is written into the law and although it created some confusion when it was passed in 2019, the aim is to incentivize both tenant and landlord in equal measure. That means your security deposit isn’t necessarily at risk. 

If landlords could keep the security deposit whenever a tenant broke their lease there would be less incentive for landlords to mitigate damages by trying to re-rent the apartment, says Ellen Davidson, a staff attorney with the Legal Aid Society in New York. She maintains the law means landlords can’t retain your security deposit simply because you break your lease.

However, Wagner says it’s an “overstatement” to say your security deposit is safe. He says the law makes it less likely a tenant will be sued for breaking a lease, but notes that damages could still include repainting, paying a brokerage to re-rent the apartment, and payment for lost rent. And of course, your security deposit is still vulnerable if there are unpaid utility bills or damage to the apartment. 

Landlords do need to provide you with a walk-through at the end of a tenancy, itemize any damage, give you an opportunity to make any repairs and pay you your money back, less any repair costs, within 14 days of the tenancy ending. If that isn’t done, a landlord forfeits any right to your security deposit. 

Be prepared for other financial consequences

Even though your security deposit is likely refundable if your apartment is clean, undamaged and there’s a working set of keys, you may still face some kind of penalty for breaking your lease. 

“A lease is a contract and contract damages would apply, subject to the requirements of the laws requiring mitigation,” Wagner says. 

Unless you negotiated it before you began renting, a lease-break policy is unlikely to be included in your lease. If it is, however, it might lay out specific monetary penalties if the lease is broken in the slower winter months or if you’re not flexible when it comes to showing the apartment to new renters. 

Adam Frisch, managing principal at Lee & Associates Residential NYC, a property management company, uses this kind of policy and says he has “very rarely had any push back from that,” noting “most tenants appreciate it’s a flat fee in return for knowing [they] can leave.”  

One small NYC landlord says he offers to end a tenant’s lease early for a specified fee. He’s one of several landlords who think tenants “appreciate certainty” when it comes to ending a lease before the full term and that tenants expect some kind of fee if the terms of the contract are not met.

Whether or not your lease has a lease-break policy, additional fees you might have to face are cleaning or painting costs. According to maintenance housing code, a landlord is required to paint every three years, so your landlord should not be dealing with an unexpected paint job, but Davidson notes that’s “not a rule that’s regularly followed.” You may have a fight on your hands if your landlord claims he needs compensation for an unexpected repaint of the apartment.

It’s not a bad idea to investigate what your landlord is marketing your apartment for. If you were paying $2,500 and it is listed for $3,000, the landlord has violated the law which states they have a duty to mitigate damages. Himmelstein sometimes recommends getting a friend to inquire about the apartment and ask the broker what it’s being rented for. If it’s being marketed above the current rent, the tenant is off the hook “because you have a failure to mitigate,” he says. 

If the new rent is lower, of course, you may be on the hook for the difference between your rent and the new rent.

Frisch says landlords are unlikely, in practice, to go after tenants for a few thousand dollars in lost rent. He says 50 percent of the lease breaks he deals with involve a tenant moving to a new city, often internationally. “The process by which I could sue someone in Europe for $5,000? It’s theoretically possible but it’s impractical and also, it just creates resentment,” he says.

What’s the deal with the tenant blacklist?

Rent laws specify that landlords cannot solely use the tenant blacklist to deny someone an apartment. That means you should, in theory, not feel intimidated when it comes to fighting back if a landlord is making demands for fees.

In practice though, the ban on using information from NYC Housing Court isn’t free of loopholes. Frisch says it’s simply “unenforceable.” He says landlords will find ways to vet incoming tenants and because landlords cannot take more than one-month’s security, it can make it more difficult for people with less than stellar credit to find housing in NYC.

How to make a case for a constructive eviction

So far, everything above applies to a scenario where you’re moving out voluntarily, rather than a situation where your apartment has become a living hell—or at least, what a reasonable person would consider uninhabitable. 

If you're leaving the apartment early because it has serious problems—such as mold, bed bugs, lead paint, or construction noise—then you may have a case for constructive eviction, in which you claim the landlord has failed to uphold the warranty of habitability.  

If a landlord is refusing to correct issues like mold or lead paint, it can constitute harassment, Wagner says. The good news is that tenant protections have increased in this area. “There’s a specific provision in the law enabling the tenant to claim legal fees in these circumstances,” he says. 

To claim constructive eviction, you must first move out. "This is risky business because if you are wrong, you have to pay the rent," Wagner says. So, before you move, it’s wise to stick around and document the problems.

“Call 311 and have Housing Preservation and Development or the Department of Buildings come in," Wagner says. "If they issue violations, that is objective proof of conditions.” 

Your detective work could include finding out via the Department of Buildings whether the building has any violations; if apartments have been illegally deregulated; if there are problems with the façade of the building; if there are issues with the efficiency of the boiler; or if the certificate of occupancy matches the use of the building.

In addition, you can take photos, send letters to the landlord, and call in experts to confirm the existence of issues like mold, asbestos, or secondhand smoke. Violations alone may be enough to pressure your landlord to let you out of the lease.

 

Emily Myers

Senior Writer/Podcast Producer

Emily Myers is a senior writer, podcast host, and producer at Brick Underground. She studied journalism at the University of the Arts, London, and graduated with a MA Honors degree in English Literature from the University of Edinburgh.

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