Roommates + Landlords

Read this before you break a lease in NYC

By Virginia K. Smith  | January 23, 2017 - 8:59AM
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While signing onto a standard 12-month lease usually seems all well and good at the time, in reality, major life events don't always work on a tidy 12-month schedule. Sometimes, we find ourselves needing to relocate for a job, ready to move in with a partner, or suddenly unemployed, and need to relinquish a rental sooner than expected.

It sounds straightforward enough, but in reality, the process can be complicated. (After all, a lease is a binding legal contract, so if you think most landlords will simply let you skip out sooner than agreed upon, you'll be in for a rude awakening.) Below, steps to ensure a smooth transition—and to make sure you don't wind up with any unexpected bills or legal hassles down the road:

Check with the landlord—and be prepared to pay a fee

Unsurprisingly, your first order of business here should be re-reading the terms of your lease, and telling the landlord about your plans. This is both as a courtesy, but also, to find out what their process will be—and this can vary widely from landlord to landlord.

"Every landlord has a different attitude regarding lease breaks," says Nathaniel Faust of Citi Habitats. "Some are much more easygoing. It also depends on how in demand the apartment is—if it's the kind of place that can be re-rented in a couple of days, it might not be such a big deal at all."

"At least with the landlords I work with, if you have a compelling reason to leave, such as a work relocation, they're willing to work with you," says Lashara Pratt of Mdrn. Residential.

But in a slowing rental market, don't count on an easy out. As we've written before, under the terms of your lease, you're legally responsible for the rent for however long you signed on for, and the landlord can hold you accountable as such. And Faust tells us that some property managers have even instituted blackout dates (generally from October through March) during which they won't allow for any leasebreaks. (Check your lease to see if this is the case for you.)

Another way this could play out: An increasing number of leases will ask for a flat fee in exchange for an early lease termination—anything ranging from $1,000 to three months worth of rent. "Some landlords are now writing early termination clauses into leases to provide a penalty if you're going to break the lease before the end of the term," says Douglas Wagner of Bond New York.

The most likely scenario, though, is that you'll need to find a tenant to replace you to get out of the lease. This is in part so that you won't have to pay out the rent for the rest of the lease, but also, because legally, if you bring a landlord a qualified replacement and they reject them, they're required to let you out of the lease within 30 days of the lease. More on that here, and details on finding replacements below. Keep in mind that if you're going this route rather than having a new tenant sign on to the lease, you'll want all these exchanges in writing in case the landlord later tries to come after you for the rent.

Find replacements for yourself and any guarantors

Again, when it comes to finding a viable replacement, your first step should be to check with the landlord. "Speak with your landlord to see what the options are," says Pratt. "If they'll assist in finding a renter, or whether you have to find someone yourself."

If the onus is on you, Pratt suggests reaching out through social networks, or potentially asking the broker who found the apartment to help you find a replacement. (Though this could potentially mean shelling out for their broker's fee, if you can't find a tenant who will pay it.) Sites like Craigslist, LeaseBreak, RentHackr, and the Listings Project are also helpful for finding potential options.

And if you're looking for a new roommate to replace you in a shared apartment, expect them to have to go through a vetting process similar to the one you completed when you moved in, if you want the landlord to agree to write up a new lease adding their name and removing yours.

"Many landlords are not going to take one person off the lease, because maybe the other people don't qualify on their own for the apartment," says Stephanie Cammarata of Bohemia Realty Group. "If you're going to be taken off, you're going to have to find a replacement for yourself."

Similarly, if there are guarantors involved, unless you line up a replacement guarantor (or your roommates are willing to pay for an institutional guarantor such as Insurent (a Brick sponsor), your guarantor will still be legally responsible for the rent through the end of the lease, even if you no longer reside in the apartment.

"Guarantors would have to be released in the same way a tenant would," says Faust. "They would need to find another suitable guarantor as a replacement."

The flexibility on this will depend on your landlord—Wagner says that many landlords won't change lease or guarantor agreements until renewal, while Pratt reports that most are flexible so long as a replacement is lined up. The bottom line is that for both you and your guarantor, you need a qualified replacement signed onto a new agreement before you can consider yourself to be legally free and clear of your responsibilities.

Hand off the utilities, too

This can be an easy thing to overlook in your rush to get out, but be sure to sign over any Con Ed, National Grid, Time Wagner, or other utility accounts that are currently in your name.

"When I see credit reports for tenants, a frequent problem is that they forgot to return a cable box or didn't shut down a cable account within a reasonable amount of time," says Warner. "And maybe the cable company ended up taking that to a judge, who defaulted against the tenant."

To avoid a messy billing hassle months down the road, "You have to advise the utilities as to who will be taking over the account," says Wagner. From there, work with your replacement to fill out any necessary forms to make the handoff official. 

 

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