How to break a lease and stay creditworthy

alien185/Getty Images

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

There are plenty of reasons you might be thinking about how to break a lease. Maybe you’re tired of your roommates or you’ve found a new job in a new city. Maybe the COVID-19 pandemic has forced you to reevaluate where you want to call home.

Whatever has motivated your decision to ditch your current home, it’s important to make sure that what you do to get out of your lease now doesn’t impact your ability to secure a new one down the road.

What happens if you break a lease?

What happens if you break a lease depends on the terms in the leasing contract. If you’re lucky enough to be in a month-to-month lease, breaking it can be fairly easy and affordable. Depending on where you live, you’ll likely simply pay for the next month’s rent and move to your new place.

If you’re tied to a lease with a full year timeline, though, there are a range of other implications to consider. Remember that your lease is a contract, and just like any other contract, breaking it comes with consequences.

The worst-case scenario is not a pretty picture: Your landlord chases you for rent, and you do not pay it. Then, a collection agency gets involved, your credit score takes a hit, and you look like a bigger risk when you want to rent again or buy a home.

The best-case scenario, however, is much smoother and more affordable. If you’re preparing to leave your lease behind, you can limit the amount you’ll owe your landlord and avoid a drop in your credit score with these steps.

How to break a lease

As you prepare to move out, follow these essential steps to make sure your lease is in fact broken, but your credit remains intact.

1. Do your research

Before you do anything, take a long look at your lease agreement. Pay extra attention to any language about early termination fees that you may need to pay and subletting your apartment to a new tenant.

2. Know your rights

If you’re hoping to break your lease because of something your landlord has done, it’s important to know if you’re legally justified in leaving the apartment. Is the building unsafe? Are there hazards or issues the landlord has failed to address after you’ve notified them of the problem? Who’s responsible for what, and what rights you have and don’t have, are generally spelled out in your lease, so, again, be sure to read it thoroughly before taking action.

3. Communicate

If you tell your landlord you want to break your lease tomorrow, that can be a recipe for conflict. Help avoid that kind of frustrating surprise by informing your landlord as soon as you know that you need to break your lease. An open line of communication can go a long way toward staying on your landlord’s good side. The earlier you make your intentions known, the more time your landlord will have to secure a new tenant.

4. Keep it in writing

Make sure you have all your communications with your landlord (emails, texts and hard-copy letters) as evidence for any potential legal action. If breaking your lease doesn’t go smoothly, at the very least you’ll have documentation of your side of the story. To be doubly sure you’re protected in a courtroom, consider sending your notice via certified mail. A landlord can claim an email wasn’t received, so certified mail is an extra layer of proof.

5. Budget

Regardless of the circumstances of your departure, you might still need to pay an early termination fee. As you plan for how much you should spend on rent in a new place, make sure you account for any expenses you will need to pay your landlord for a clean break. 

What to do if your landlord won’t let you out of your lease

There is a chance that your landlord will be stubborn and hold you to your full lease term. In this case, you should investigate what state laws stipulate about breaking a lease. For example, in Texas, landlords are required to take steps to find a new renter, rather than simply chase you for the rent. Many other states have similar laws.

However, you may need to be part of the work to find a replacement tenant, too, such as:

  • Subletting the property – Do you have any friends or mutual acquaintances who might want to rent the place? Can you list it on your private social media page to see if there is any interest? In this case, you might be able to sublet it. Make sure that you trust whoever is moving in, though. Your name is still on the lease until it expires, which means your credit is still at risk.
  • Finding a new tenant – If your landlord refuses to do the work of advertising the property, ask him or her if you can take the reins. List the property on Craigslist, Zillow, Trulia and any other online directory. While you might wind up spending some money to promote the listing and do the work of showing it off to prospective new tenants, that sum will ultimately be smaller than paying the remainder of your rent.

Again, it’s important to thoroughly review your rights as outlined in your lease, as well as tenant laws in your state, to see what your options and responsibilities are. Armed with this information, and with any luck, your landlord will let you out of your lease without too much hassle.

Learn more:

Written by
David McMillin
Contributing writer
David McMillin writes about credit cards, mortgages, banking, taxes and travel. David's goal is to help readers figure out how to save more and stress less.
Edited by
Mortgage editor