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You've been transferred to the Tokyo office. Your L.A. girlfriend gave you an ultimatum: move out West or call it quits. You’ve lost your job and suddenly that extra bedroom is an impossible luxury. Whatever the reason, you have to break your lease. Still, you can’t just pack up and leave.
A lease is a legal contract. It's binding. You’ll either have to find a way to uphold your end of the bargain, convince your landlord to let you out, or find a reason to void the agreement.
“The best policy is to be open and honest with the landlord,” says Gus Waite, a relocation specialist at Dwellworks, so contact your landlord or the management company to let them know you’ll be leaving the apartment earlier than expected. From there, you have a few options.
[Editor's note: This story was first published in 2014.]
We’ve rounded up the main exit strategies below, as well as how to execute them with a minimum of friction and the lightest blow to your wallet.
1) Find another tenant
The good news: If you find another qualified tenant, New York state law requires the landlord to “assign” the lease to the new renter and let you out of your lease responsibilities within 30 days. The bad news: that tenant has to pass muster with your landlord, and good luck getting help from the owner tracking one down.
If a landlord decides your candidate isn’t suitable, she can turn them down, provided she gives you a valid reason for the refusal, says real estate attorney Steven Wagner of the firm Wagner Berkow (a Brick Underground sponsor, FYI). For example, if your replacement plans to use the apartment as a therapist's office, that could be a reasonable basis to refuse him or her. To qualify, a tenant should make 40 times the monthly rent at minimum, have a good credit score, and have an employment letter and copies of recent pay stubs and bank statements at the ready.
Before casting your net for a replacement tenant, figure out how the landlord or management company plans to handle the new lease, especially for renters hoping to stay on longer than a scant few months. Will she allow the tenant to stay for the rest of your lease term, or require the tenant to sign an entirely new year-long agreement? What will renewal terms be once that initial period is up?
To find someone to take over your lease, try the usual suspects, like posting on Craigslist and Facebook. Websites like Leasebreak connect people looking to break their leases with those in search of short-term rentals.
You could also, of course, go with a rental broker. If you liked the agent who helped you locate the apartment initially, just call him or her back and ask for help, or work with a new agent.
The new tenant is technically on the hook for the broker's fee—which usually ranges from a month’s rent to 15 percent of a year’s rent—but you may find yourself ponying up the fee, especially if you're desperate to get out quickly.
“The vacating tenant might pay the broker in order to remove the commission as an obstacle from anyone looking to rent,” says Douglas Wagner, head of leasing, sales, development, and commercial real estate at Bond New York.
Still, a broker could relieve you of some headaches. The broker can post your listing to the brokerage's internal database, widening your audience, and, Wagner adds, can "coordinate all of the apartment showings, they can screen out anyone who might not be financially qualified to rent in the building, they can handle your landlord’s requirements and lease-break protocols for you, and they can serve as a single point of contact to identify a new tenant."
2) Sublet your place
Just as you have the right to assign your lease, you also have the right to sublet your place if your building has at least four apartments.
Subletting works best when the tenant who's leaving expects to return to the apartment one day, according to Bond's Wagner. In fact, many landlords will only allow a sublease if the tenant can demonstrate that he will be coming back, and often they prefer a lease assignment if that's not the case.
It's also a bit of a risk, since you're still legally responsible for the apartment.
“If the subtenant causes damage ... in the building, the tenant will be held responsible, and if the subtenant doesn’t pay the rent on time, the tenant could suffer irreparable damage in the form of a bad landlord reference in the future, or worse—housing court," Wagner says.
You can find a subletter the same way you’d find a new tenant, by advertising on your social media accounts or the rental and roommate sites listed above. You could even enlist the help of a broker if you’d like someone else to do the heavy lifting. Once you've found a suitable candidate, you should notify your landlord. If she doesn't respond to your request within 30 days—or within 30 days of receiving any additional information she's asked for—then this is interpreted as legal consent.
3) Ask to be set free
It’s so simple, it just might work: check with your landlord about the best way to end your stay early.
Chances are, she'll be more likely to work with you if you tell the truth about why you’re moving, Waite says. She’ll also be more willing to let you go during a hot rental market, or when it’s closer to the end of your lease.
Some buildings will make you pay an early termination fee—anywhere from a flat rate of $1,000 to three or four months’ rent—and help you re-rent the unit. Other buildings have lease assignment policies that won’t penalize you financially, but will require you to personally locate a new renter.
“Send a registered letter to your landlord explaining why you need to break your lease,” Waite advises. “Ask them for any suggestions they might have that would allow you to get out of the lease.”
If your apartment is rent-stabilized and you’ve been there at least a year, your landlord may welcome the opportunity to hike the rent on an empty unit—known as a “vacancy increase”—or to upgrade the apartment, which would let them increase the rent by 1/40th of the cost of improvements.
The trick here, as in every situation that ends with you walking away early, is to get your landlord to sign a “surrender agreement," which is a standard legal form that states that both you and your landlord agree to release each other from the obligations of the lease. It shouldn't be difficult to get since it's in the landlord's best interest to sign.
"It's not just to protect you as the tenant leaving," says Wagner, the attorney. "It also protects the landlord, so there is no question that the apartment is available for re-rental."
You can find a template online or at a stationery store, but basically the surrender agreement should identify your name, the landlord, the address, and the dates of the lease. Legally speaking, every contract must also have some "consideration" between the parties, meaning money trading hands, which could be as little as $1, Wagner says. Also, be sure that a provision is in there requiring your landlord to return your security deposit in a reasonable amount of time, usually 30 days.
4) Swap addresses, not landlords
If you’re moving but not leaving town, you could check with your landlord about switching to another apartment in their portfolio. Indeed, some of the bigger management companies in the city will let you break the lease in this case, particularly if you plan to pay more or upsize.
5) Annoy your landlord
Although it's one of the less honorable tactics at your disposal, pestering your landlord may convince them it would be easier to find a new tenant than have you stay out the rest of your lease.
“The landlord will want to retaliate, but the landlord’s running a business,” says Wagner, the lawyer. “At the end of the day, they’ll make a decision which favors them economically.”
One of the surest ways to do this is to call 311 and inform the city of (legitimate) violations at your building, whether it’s problems with the facade, mold, vermin or other issues. Some agencies that handle these complaints are the Department of Buildings, the Department of Environmental Protection, and the Department of Housing Preservation and Development. And for any existing violations, which will be listed on the DOB or HPD database, a well-timed call to remind the city of the property owner’s lack of attention could help your cause, Wagner says.
The city keeps the identity of people who file complaints confidential, but your landlord won't have a hard time putting two and two together if the complaint concerns your apartment or if you threaten to call the city about a specific issue beforehand. You could also file a so-called HP action, which is a relatively straightforward housing court complaint that effectively gets city inspectors out to your building to look for violations.
Lastly, there’s always the chance that your landlord illegally destabilized your apartment, taking it out of the state’s rent-stabilization program. Start by getting your apartment's rent history from the state Division of Housing and Community Renewal. This can also help you determine whether the current rent is legal.
As with any of these strategies, caution is the name of the game. A landlord could become aggressive, so this approach is not for the faint of heart. (Note that if a landlord does fire back with a lawsuit within six months of you complaining to a government agency, it’s legally considered retaliation under New York state real estate law, and you can win damages in court for it, Wagner says.)
One thing you don’t want to do is to breach provisions of your lease by, say, withholding rent, damaging the apartment, or doing anything illegal in your place to annoy your landlord. Though sometimes a landlord will agree to let you out of your lease to get you to stop, Wagner says, it’s entirely possible he’ll take you to court and sue you for damages and legal fees.
“Having the landlord bring a lawsuit—it’s risky business, and there’s a downside to it," he says.
6) Force an eviction
If you’re leaving your apartment because it’s uninhabitable—think mold, bedbugs, lead paint, construction noise, and so on—then you may have a case for constructive eviction. Basically, you’re claiming that your landlord has failed to provide you with a livable apartment—in legalese, known as upholding the warranty of habitability—and effectively forced you to move out.
This is not something to undertake lightly. First you have to move out, and if you don’t prove your claims, you’ll have to pay the rent, Wagner says. So you better start documenting the conditions before packing your boxes.
Call 311 and have building inspectors come out. If they issue violations, that’s objective proof of the problems, Wagner says. You can also take photos, send letters to the landlord, or call in experts to confirm the existence of mold, asbestos, or secondhand smoke. A certified industrial hygienist is your best bet for the testing.
The violations may be enough to convince your landlord to release you, but you may have to take the issue to housing court. This is, again, a major step. Winding up in housing court, even if you initiate the case, is a permanent black mark on your record that can land you on the so-called tenant blacklist. Renting again in the city will not be easy.
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