You Have to Break Your Lease…Now What?
What is a Lease Agreement?
In plain English, a lease or rental agreement is a contract. It sets out all the terms of the agreement between you and your landlord regarding the lease or rental of property. You signed it (or orally agreed to it) when you entered into a lease with your landlord, and it’s enforceable by law.
Can you break it?
You can break a lease and you can break it in many ways, but rarely can you break a lease without any consequences. Remember that the lease or rental agreement is a legally enforceable contract. So what does that mean? It means that when you break it, your landlord may have a claim against you for damages. The law says that damages are the remedy of the aggrieved party. It’s not always cut and dry who the aggrieved party is in a landlord-tenant dispute, but, depending on the way you break your lease, that party could be your landlord, and if so, she is entitled to damages that you may have to pay.
How can you break a lease?
Your lease or rental agreement will set out its terms: What property are you renting? From whom? For how long? For how much? When is rent due? Is there a security deposit? How much? It may also set out lots of additional provisions that deal with rights of parties, obligations, remedies, or other miscellaneous terms: What do you have to do as a tenant in addition to paying rent? How much notice must your landlord give for coming onto the premises? What constitutes a default under the agreement? Parties to contracts are typically free to set their terms, but often the law controls the parameters.
The Montana Residential Landlord and Tenant Act is the law that controls the relationship between you and your landlord. Does your lease or rental agreement require you to pay your rent on the 1st of each month, but you had to fix your car and now you’re behind? Are you required to keep the lawn maintained at the property under the terms of your lease, but you’ve been busy at your job and have let it go? Is your lease for one year, but it’s been three months and you’re ready to move out? If there are terms set out in your rental or lease agreement that you violate or fail to meet, you are breaching the contract and breaking your lease. The law controls what happens when you fail to make good on your part of the deal.
What happens when “life happens” and you break your lease?
Failing to meet your obligations under the lease or rental agreement is a breach of contract that may entitle your landlord to damages. It sounds scary: you’ve broken a contract and now you have to pay. But the law takes into consideration the fact that life happens and sometimes even responsible tenants have no choice but to break their leases.
Say you’ve entered into a year-long lease in Missoula and with six months left, you get a great job offer in Billings. You can’t pass it up — you’ve got to move right away! But moving out means that you will have to break your lease agreement and abandon the property. This breach makes your landlord the aggrieved party because you have damaged her by failing to keep your promise to lease the property for a one-year term. She has a right to seek a remedy for your breach via a claim for “appropriate” damages.
What will “appropriate” damages be? In other words, how much will the court require you to pay? Will you have to hand over six months’ rent? More? Less? How will the court decide?
What are your landlord’s obligations?
While it’s impossible to predict with 100% certainty what you will owe when you break a lease, it is possible to know what factors the court will consider when determining the amount you will have to pay. The law is clear on this point: “The aggrieved party has a duty to mitigate damages.”
Simply put, this means that your landlord must take steps to reduce the amount of money that you owe for breaking your lease. Your landlord cannot simply sit back and wait out the remainder of your lease, or take you to court as soon as you terminate, and claim that you owe her six months’ rent in damages. She will have to prove the damages amount to the court, and she will have to show the court that she took reasonable and appropriate steps to lessen that amount.
What does mitigating damages look like?
Your landlord needs to advertise the property you were leasing and actively show it to potential tenants. If she has multiple properties — say, other apartments in the building that are just like yours — she has to give yours priority and show it to renters first. She doesn’t have to force your property on potential renters, or go out of her way to an extent that would be unreasonable, but she does have to actively try to get it rented.
Whatever your landlord does to mitigate the damages will be facts that must be proven in court, which is why it’s difficult to be certain what the exact consequences of breaking a lease will be. But knowing what the landlord’s duty is under the law can help you help yourself if you must break your lease.
What can you do to protect your bottom line?
When you break your lease, you expose yourself to consequences. One consequence may be that you have to pay your landlord. But, you might not have to pay out the remainder of what you owe on the lease. Just remember that your landlord has a legal duty to mitigate the damages you caused by breaching the contract, and that the court will consider what efforts she has made to lessen that amount. But, long before a dispute arises, there a few things you can do to help your landlord help you.
1. Communicate and cooperate with your landlord. In order to rent the apartment you are vacating, the landlord will need to show it. This means you need to be flexible and receptive to potential tenants. If you are still occupying the property, keep the place neat and presentable!
2. If you’ve moved out, do some reconnaissance. Are you still in the area or have a friend who is? Drive by and see if the landlord is actively advertising the property for rent. Check local ads (including the Housing Finder) and see if the property is listed there.
3. Be proactive — advertise for yourself. Create an ad on the Housing Finder or on another online forum and solicit new tenants to take over your lease. Put them in contact with your landlord (be careful not to enter into a new lease agreement with them — your lease agreement may forbid this and doing so will put you in more hot water!). Try to find potential renters for your landlord, and put the parties in touch. Help your landlord help you!
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