Breaking a Lease: What to Know and How to Do It

Posted on June 8, 2019

The average rent around the country is slated to increase by six percent in Canada. Toronto residents may see that number climb to 11 percent. This is something happening across the board, even "nice" landlords will increase rates.

Those who live in a unit with a not-so-nice landlord may feel trapped in a sinking ship. If the thought of breaking a lease has crossed your mind, then things must really stink. Either you can't afford rent anymore or the place doesn't justify the rent.

This is becoming a much more common scenario these days. There are ways to go about breaking a lease agreement, though. You'll just need to do your homework and assume nothing.

If you've exhausted all your other options to stay in your apartment until the lease is up, this guide is for you.

Terms of the Lease

Not all lease agreements follow the same rules. Some are intentionally pretty vague, leaving some legal gray areas. Other leases are very detailed and specific, for better or for worse.

Either way, you should have a section dedicated to early lease termination. This is where you may find some loopholes or ways out of your lease. Usually, no matter the reason, the landlord will charge you a fee.

This might mean they get to keep your deposit or at least some of it. A flat fee is charged by some, which probably ends up being more than the deposit. Some stipulations on how much is charged include the amount of time you give before terminating and the condition of the move.

Worst case scenario is that your lease contract states that you can't break the lease, no matter what the reason is. This usually indicates a pretty unreasonable landlord, which should've been a red flag moving in. If you've never had a problem with your landlord before, it's still worth trying to negotiate out of it.

Timing is Everything

Breaking a lease is rarely done a whim, so use the time leading up to it to plan your escape. This is where you want to formulate your reason for leaving and consider your options. If you're a tenant that has paid their rent on time every month, this is a good argument.

Some landlords don't care about that but emphasize that this will continue until the month you move out. You will help make the transition as smooth as possible, so prepare your move and organize your belongings. Also, check for any potential repairs needed before moving.

If you can't plan this move out months in advance, prepare for the possibility of not getting your deposit, paying a fee, or paying the rest of the lease off. This may mean a monumental loss of finances at the time.

Financial planning is important to start as soon as you're in your 20s. You may have heard this before, but these are the moments when you need it the most. Keeping a small nest egg is meant to cover the unexpected.

You might be able to get away with negotiating a payment plan, which you should take right away. Landlords aren't normally flexible with how they want their money.

Approach and Negotiation

Whatever you do, don't try to have this conversation over the phone. Increase your odds of generating empathy from your landlord by talking in person. Try not to let the cat out of the bag and request the soonest you can meet them.

With your prepared statement, try to maintain a level of transparency with your motivations. Don't make up a bunch of reasons why you can't stay until the end of the lease. Break down every reason why you can no longer afford the rent.

Depending on how long you've rented, it's not unheard of for landlords to either pause the rent increase or reduce it. Having you stay there longer is in their best long-term interests. They won't need to rush to find a new tenant and can screen more applicants.

Maintain tact and professionalism, but also avoid too much formality. Try to pluck at those heartstrings with a passionate plea. Demonstrate that you read the lease and explain what you think of it.

Make it your goal to walk out of this conversation with a mutual understanding. Consider options that will allow both parties to transition smoothly and quickly. If there's a stalemate, then your only other choice is legal proceedings.

Breaking a Lease Legally

The lease agreement isn't the end-all-be-all if it contradicts the law of the land. Contracts can say whatever they want, but they won't hold up in court just because you signed them. There are a few key areas of leases that render the agreements null and void.

For starters, if you're in the military and are told you need to relocate or start a tour, you can break the lease without penalty. If you've been on the receiving end of a domestic violence incident in the past six months, you can exit the lease. If the landlord is guilty of neglecting the property or it poses a health risk, the lease is void.

Some landlords get away with forcing people to pay early termination fees, even though they have no right to charge them. There are illegal rental situations, subletting, and etc. that can't use a lease agreement. Landlords who break their own lease terms also means you're off the hook.

If they don't give you 24hrs notice before inspecting your unit, that's a breach of renter's rights. The laws vary based on region, so you will need to research the ones in your area before proceeding. It's a good idea to have a lawyer by your side if you can afford one.

Alternatives and Compromises

If the problem with staying in your current until comes down to money, consider alternative ways of staying until the lease ends. The most popular and straightforward way to subsidize higher rent is doing AirBnB. Even if it's for a couple of days out of the month, that's all you need to keep up with the increase.

Remember, Airbnb isn't subletting, so you don't need to notify your landlord of anything (you should, though). The general rule is that the person staying with you cannot do so for longer than one-to-three weeks out of the month. Again, the exact length of time may vary based on the city.

If your lease states that subletting is allowed, this could allow a more permanent solution. You might be able to stay in your new apartment while you rent out the old one, win-win situation. If you do go this route, make sure you find an insurance agent and look into getting renter's insurance.

You still need to cover yourself if any property damage is incurred while you're subletting. The best case scenario is that your landlord agrees to allow you to transfer your lease over. You could sweeten the incentive by telling them that they've been staying with you for the past couple weeks.

Easy transition with the least risk on both parties.

Biting the Bullet

Getting stuck in an apartment that you cannot afford with no plan-B is awful. The last thing you want to do is force yourself in a situation of misery. If you absolutely cannot break your lease, just move out and go the AirBnB route.

The landlord won't notice you're gone if you keep paying the rent. At the end of the day, all landlords care about is a low-effort tenant who pays on time. As soon as you start asking them about rent negotiations or unit improvements to match the increases, they'll get more difficult.

Until more rent control measures are passed, you're going to find that most landlords operate this way. Renting units out isn't a noble profession, there are no sacrifices being made. If you do find that mystical landlord who listens and offers very fair lease terms: never leave them.

Move Carefully

Nothing ever lasts forever in the rental world. Breaking a lease is something most of us will experience at some point. Sometimes it will come down to something as simple as loathing your neighbors.

Getting out of a bad situation and moving into a worse one requires careful planning. If things have gotten so bad that you can no longer stay and must move quickly, prepare yourself with experienced, professional advice. Here at Insurdinary, we are here to help minimize mistakes.

Whether it is finding the right renter's insurance or protecting your future home, we have the answers. You can contact us anytime for free insurance advice. Get a free quote on home, life, auto, travel, and tenant insurance from us today.

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