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What Happens When You Need to Break Your Lease?

While breaking a real estate lease agreement can have financial and legal repercussions, there are times when it is absolutely necessary to do so. When this occurs, it's important that the tenant understands that even though they can be held liable for the remaining rent due on the lease agreement, there is a duty to mitigate on the part of the landlord, which means that they must actively seek to re-rent the property.

The Landlord Must Make an Effort to Re-Rent

When an individual signs a residential lease agreement they are promising to occupy the property for the time period specified in the lease agreement and pay rent for that duration. When the lease is broken, the landlord can hold the tenant liable for the remaining lease term depending on the various state laws that apply. However, most states require that the landlord makes a diligent effort to re-rent the property as soon as possible. This is known as a duty to mitigate and it offers certain protections to tenants by preventing a landlord from simply sitting on a vacant property and refusing to re-rent it.

Mitigation Laws Limit a Tenant’s Financial Liability

While the duty to mitigate requires that a landlord attempt to re-rent the property, it does not force them to do so in a specified period of time, nor does it require them to forgo their selection criteria in an attempt to rent the property quicker. It only requires a landlord to make a reasonable effort to re-rent the property, which means the tenant, at a minimum, will be held responsible for at least one month's rent.

Mitigation Laws Can Protect the Tenant

While a landlord has a legal right to pursue a tenant for rent lost while a property is vacant, states with mitigation laws generally protect the tenant from being forced to pay the remainder of the lease agreement when they do not occupy the property.

The Landlord Can Still Sue for Breach

While a tenant might not be held financially responsible for the remainder of the lease, this does not mean that a landlord is incapable of doing other harm, such as providing a negative reference or suing in small claims court for a civil judgment that could appear on a credit report. Because of this, it is important for a tenant to communicate with a landlord whenever possible. If a replacement tenant can be found that is suitable to the landlord, it can go a long way to resolving any issues that might develop when a lease needs to be broken.

If you need to break you lease then you should consider sending a notice to vacate letter to your landlord as a first step in the notification process.