Breaking a lease before it ends can have a negative impact on your finances. Your landlord may turn your case over to a collection agency and may even sue you for the balance on your lease. Before moving out, work with your landlord to come to a mutually agreeable lease termination agreement.
Lease Termination
Breaking a lease is like breaking a contract. If you don't fulfill your responsibilities, such as paying your rent for the duration of the lease, the other party (your landlord) can take legal steps to recoup her losses. While many states require landlords to make a good-faith attempt to re-rent a home after a tenant terminates a lease early, if your landlord can't find a new renter, you may be responsible for paying the rent for the duration of the lease, even if you aren't living in the home.
Leases and Credit
If you break your lease and don't pay your rent as agreed, your landlord or his property management company may decide to aggressively pursue payment. You may first receive a bill for the rent you owe under the lease. If you don't pay the rent due, your former landlord or property management company may hire a collection agency. The collection agency, or property management company itself, may report your debt to the credit bureaus, damaging your credit. Some landlords or collection agencies may also take you to court.
Judgments
If your landlord or a collection agency successfully sues you, the case becomes a matter of public record. Credit bureaus research public records and include information about court judgments on your credit report. A judgment can stay on your report for up to seven years if you pay the judgment. If you don't pay the judgment, it can remain on your report until your state's statute of limitations on debt runs out.
Working with Your Landlord
If you must terminate your lease, make an attempt to work things out with your landlord. Help him find a new tenant for the place, or offer to pay an extra fee to terminate the lease. If your landlord does agree to let you out of the lease, be sure to get this agreement in writing. Having a written agreement can prevent your former landlord from later trying to sue you for breaking the lease.
0 comments:
Post a Comment