Loans Answers

BREAKING OUT OF A LEASE

Question: Here’s the story:

I am renting an apartment in Arlington, VA. My lease is for one year. I am also in the process of buying a house. My question is:

If I have to settle before my lease end and have to move out of the apartment before the lease end, what is the maximum penalty that the landlord can charge me? Is there any rules/regulation that applies? What are my choices?

Please respond quickly because this matter is quite urgent.

Thanks much

Answer: Maximum penalty? Depending on state law, the rent for all remaining months of the lease, cost of cleanup – even normal wear and tear – and rerent costs such as advertising and the commission to a broker for renting the unit. Some states do require that the landlord try to minimize these charges, but a lot will depend upon the rental conditions where you live. Even in a fancy complex, the management is not required to rent your unit ahead of any other previously vacant unit.

Best suggestion is to take a look at the Virginia law. It is posted on the Internet. Start at the state capitol home page and then noodle around.

In many states, you may have a difficulty getting the mortgage because the lender will want a credit statement from your current landlord. Many of these credit info requests include a line asking about a lease and the end date. The lender wants to see how you treat your agreed housing expenses; it is the #1 indicator as to how well you will repay the mortgage.

If only a month or two remains on the lease, talk to the management and explain your situation. Perhaps, for a fee, they will initiate a rerent process. If many months remain, try to find a sub-tenant to take over the remaining lease. The sub-tenant will need be approved by the landlord to minimize the chance of you receiving a bad credit report. In other words, the landlord does not have to take just anyone you come up with. And, until the lease runs out, if the sub-tenant goofs up, you will still be responsible.

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