A lease is a written agreement for the rental of a property for a fixed amount of time—typically one year. When the fixed amount of time (the “term” of the lease) is over, the lease ends. At this point, one of a few things can happen:
Sometimes, though, you can’t stay in your rental through the end of your lease—an unexpected event happens and you have to move out. If you’re lucky, your landlord will agree to let you go—a response most likely if your landlord is a decent sort or there is a shortage of rental housing and hordes of eager applicants—or, ironically, if the landlord considers you a pain in the neck and would be delighted to say good-bye. If your landlord agrees to let you out of your lease early, be sure to put the agreement to cancel the lease in writing.
But what happens when you don’t have your landlord’s official bon voyage? Like lots of legal answers, it depends—your state’s law might regulate what your landlord can do when you move out before the end of the lease. Also, the status of the local rental market might also affect what happens after you break your lease—if there’s a lot of rentals on the market, your landlord might not be able to rerent, and you might be on the hook for all of the remaining rent.
Let’s start with the basics: Your lease is a contract, obligating you to pay rent for the entire term. The fact that you pay in monthly installments doesn’t change the fact that you owe the landlord for the entire amount. So if you split early, what’s to stop the landlord from suing you for the remaining months’ rent?
Fortunately, in most states, landlords cannot simply sit back and wait for the term to end, then sue you for the rent due after you left. Instead, landlords must take reasonable steps to rerent your former place and, if they are successful in rerenting, credit rent received from the new tenant to your debt. In legalese, this duty is called the landlord’s duty to mitigate damages. Before you make the move, check your state law on landlord's duty to rerent (that is, to mitigate damages). This tenant-friendly rule has some limitations, however:
Unfortunately, many landlords are unaware of their duty to rerent for the benefit of the departing tenant. Even landlords who are aware of the rule often find the notion that they must make an effort to minimize the financial hit to someone who broke their lease tough to swallow. The response of some landlords is to keep the security deposit (at least) and maybe even send a threatening letter demanding the balance of the rent. If this sounds like what happened to you, read on.
If you’ve broken your lease and taken off, expect to lose a month’s rent. Even if state law requires your landlord to mitigate, most judges give landlords a month of rent as damages, no matter how quickly they advertised and showed the unit—or how quickly they could have rented it if they had tried. Most likely, your landlord will subtract this month’s worth of damages from your security deposit.
But being asked to pony up the rest of the rent due under your lease is something else entirely. If your landlord sends you a letter demanding the balance due under your lease, respond with a polite letter, citing your state’s law. Doing so might make your landlord think twice about sitting idle and waiting to collect rent from you for an empty apartment. You can use the Sample Letter Alerting Landlord to the Duty to Mitigate, below, as a template for your letter.
But what if your letter doesn’t produce the desired result? You might be headed to court. Your former landlord might sue you for the rent due from the time you moved out until the end of the lease, or you might sue your former landlord to recover unreasonable deductions from your security deposit.
If you or your landlord sues, you’ll need to have some proof that the landlord failed to mitigate to support your position. After you leave the rental, collect evidence of the landlord’s efforts (or lack thereof) to rerent your former unit. Try to find out whether the landlord advertised (check Craigslist and rental ads for a month or so), showed the unit (ask the neighbors), rented comparable apartments but not yours, or in fact rented the unit and is now attempting to double-dip. In some states, if you end up in court arguing that the landlord failed to take steps to rerent, you can’t sit back and wait for the landlord to produce proof that he diligently tried to rerent. Instead, you will have to supply the proof of his laziness.
June 21, 20xx
Bill C. Lecter
90 Maple Avenue
Monroe, CA 90000
Dear Mr. Lecter:
Until recently, I rented your flat at 78 Oak Street in Monroe. Unfortunately, a job transfer made it necessary for me to move to Harding, some 100 miles away. As I explained in late May, I had no choice but to break my year’s lease on June 1, 20xx. The lease had six months left. I left owing no rent for the time that I lived there.
I was disappointed to receive your letter dated June 18, 20xx, in which you informed me that you expect me to pay you for the remaining six months’ rent. You stated that you will keep my entire security deposit (two months’ rent) and have demanded that I pay you for the remaining four months' rent.
May I direct your attention to California Civil Code Section 1951.2, which requires a landlord to use reasonable efforts to rerent after a tenant has broken the lease. As you know, rentals are scarce in this town, and I would think that you could rerent my flat, which is quite nice, fairly quickly. While I am prepared to cover one month while you prepare, advertise, and show the unit, I am certainly not willing to pay further rent on an apartment that you have purposely left empty.
Please send a check for $[____] [name a specific amount] to the address below my signature on or before July 15 [give a specific response date].
23 Seventh Avenue
Harding, CA 90000
The previous section applies to situations in which you do not have a legally justified reason for leaving. However, the law recognizes that sometimes tenants have justifiable reasons for moving out of a rental before their lease ends. These include: