Terminating lease early

[dengt]

We currently resider in the apartment, had been there for past 7 years. Our lease is over Dec 1, but we have to move out 2 months early.

How do I deal with landlord in this case? Do I lose my security deposit?

Thanks

[dealing3000]

I would say it would be easier for your LL to rent your place out for Oct 1 than Dec 1. Explain that you have to leave early to your LL and try to get back everything and not lose a cent. This way both you and your LL make out. Of course if your LL refuses then you would lose your Sec Deposit and could be sued for the last month's rent as well (not likely though).

[dengt]

What rights do I have to teminate lease early if the lease has no info on early termination?

[dealing3000]

If it is not explicitly stated in the lease then you have no right to terminate it early. Some leases have a two month penalty in them but since yours does not if you break it you are liable for those last two months. Like I said, your best option is to work with the LL to get out of the lease and get your agreement IN WRITING!

[TenantNet]

Came across this piece this morning on Inman News, which is a general Real Estate blog ... and hardly pro-tenant, so take it with that understanding. Also, the article speaks in general, not specific to NY. If the issue of penalty is applied this way in NYC, the tenant should consult a lawyer for a more specific answer.

Rent it Right
By Janet Portman, Thursday, August 21, 2008.
Inman News

Q: Several weeks ago, my college-age nephew signed a one-year lease with several students in an apartment complex. He paid the first month's rent and a portion of the security deposit. A few days later he learned that a dorm room is available and wants to get out of his lease. His roommates and the landlord are upset and are demanding that he continue to pay rent until he finds someone to take his place on the lease. They also want him to forfeit his share of the security deposit. The landlord offered to let him out of the lease if he pays a penalty equal to his share of the rent for two months. Isn't there a grace period that would allow him to change his mind? --Robert G.

A: Your nephew has broken his lease even before moving in, and has potential legal problems with both the landlord and the roommates. Before you can advise him, you need to understand the law (Can the landlord impose a penalty? Is your nephew responsible for finding a substitute?) and the market (How desirable is this rental? How difficult will it be to find a suitable replacement?). After you see the whole picture, you'll know what to do.

Unfortunately for your nephew, however, there's no easy out here. A few consumer transactions do come with a legally required cancellation period -- under the Federal Trade Commission's "cooling off rule," you have until midnight of the third day to cancel a door-to-door sales contract for more than $25, or a contract for more than $25 made anywhere other than the seller's normal place of business. Many states have additional cancellation rules, covering contracts for dance or martial arts lessons, credit repair services, health club memberships, dating services, weight loss programs, timeshare properties and hearing aids -- but not leases. The moment he penned his name to the lease, he obligated himself to its terms.

The landlord's solution to this lease-breaking -- imposing a penalty -- is not a legally sanctioned response, and your nephew doesn't have to go along with it. Judges routinely enforce contract provisions that make people pay for the actual damages they cause when they break a contract. A penalty, on the other hand, is designed to punish, not to fairly compensate the other side. Judges won't enforce penalties, particularly in a contract between a business and a consumer (rather than a business-to-business transaction).

Landlords don't have to resort to illegal penalties to make sure that they don't lose money when a co-tenant breaks a lease. They are entitled to the entire rent from the remaining co-tenants, courtesy of the principle of "joint and several liability" (think of it as the legal version of the Three Musketeers' "All for one and one for all"). The landlord may be concerned that without your nephew's contribution, the remaining tenants won't be able to come up with his share of the rent and the landlord will have to evict them. In that case, he can choose to accept a short rent check and make up the difference with funds from the deposit, but savvy landlords won't go this route. After all, they might need to use the deposit to cover more unpaid rent or to pay for repairs when the tenants move out. Most landlords will demand the entire rent and leave it up to the remaining roommates and the departed co-tenant to work it out among themselves.

This puts your nephew's roommates in a difficult spot, having to shoulder his portion of the rent until they find (and the landlord accepts) a substitute. They cannot just sit back and expect your nephew to produce a new roommate, however -- they have to take reasonably prompt steps to replace him (and of course, your niece should help in the search). Once they find a sub, your nephew's obligation to pay rent ends. If it takes them a month to find a new occupant and they've had to dip into their pockets to cover his share of the rent, they can sue him for that amount. If the rental is desirable, the price is right, and the roommates are an attractive bunch, they might find a new co-tenant right away, and your nephew's losses would be minimal. If the opposite is true -- the rental is in a college town awash in vacancies, with many opportunities for better digs at lower prices -- he could be responsible for his share of the rent for the entire lease period.

Now, let's put this all together. Because the landlord's "penalty" is unenforceable, your nephew can ignore it if he's pretty certain that he and the roommates will land a substitute in less than two months (he'll still have to pay his share until that person takes over). But if the market is soft, or the rental just isn't that attractive, settling for those two months might actually be the smarter thing to do. If your nephew ends up paying rent at two locations for a time, he can think of it as additional tuition, for a class called "Contracts."