Even if you think you know everything about your security deposit, one situation can raise new questions: the early termination of a lease. If you break your lease, do you lose your deposit? Can a landlord keep your deposit in the event of a breach of lease if it makes your home uninhabitable? Here’s what every tenant should know.
- 1 Can a landlord keep your security deposit in the event of a breach of lease?
- 2 What happens when you break your lease early?
- 3 What information should a rental agreement contain?
- 4 Are there other costs to consider when breaking a lease?
- 5 When do tenants have the right to break the lease?
- 6 How to break a lease and get your deposit back
Can a landlord keep your security deposit in the event of a breach of lease?
Security deposits are a constant when it comes to renting. Usually equal to one or even two months’ rent, the security deposit serves as a backup for a landlord if their tenant fails to pay or damages the property. Although you often get back all or part of your security deposit, there are some situations where homeowners can legally withhold all or part of the funds from your security deposit. Common reasons a landlord keeps your security deposit include:
- You are causing significant material damage.
- You leave the device in a condition that requires excessive cleaning.
- You miss rent payments.
- You leave utility bills unpaid.
- You break your lease earlier.
So the simple answer to the question “Can a landlord keep your security deposit if you break the lease?” ” is yes. However, every tenant should know in detail why a landlord can keep a generally refundable rental deposit in these cases – and the situations in which tenants can legally break their lease.
What happens when you break your lease early?
Whether you sign a monthly contract or a lease for an entire year, you agree to pay rent for that period. But life can interfere with the best plans. Maybe you find the job of your dreams, but it’s in another state. Maybe you decide to move in with your partner to another apartment, or a breakup means you have to move out of your common place. Maybe you even need to break up with a horrible roommate.
Whatever the good reason you broke your lease, it means your landlord needs to find a new tenant, deep clean the property, and more. They are not getting the cash they expected. So many homeowners use your security deposit to cover the costs associated with your early departure.
What information should a rental agreement contain?
Check your rental agreement if you plan to break your lease. Most agreements include an early termination clause of the lease. Without this clause, your landlord may not have the right to withhold your security deposit.
An early termination clause includes:
- Mandatory notice period: Your lease must indicate the number of days of notice you must give in the event of early termination of the contract.
- Financial responsibilities of the tenant: Your lease should clearly state what you have to pay and when you have to pay it. For example, a lease should state whether you must pay rent covering all or part of the rent remaining due during the term of the lease if you do not give sufficient notice.
- Security deposit: Your lease agreement should state that your landlord can keep all or part of the security deposit if you break the lease prematurely.
If the lease does not mention this information, you may have legal recourse to recover your deposit. In addition, the lease termination clause and the rental agreement as a whole must comply with local and federal housing laws.
That said, your signed lease represents a contract between you and your landlord. If you break this contract, the law generally holds you responsible for paying what you agreed to pay when you signed the lease.
Are there other costs to consider when breaking a lease?
You will need to consider other factors beyond whether or not you get your security deposit back when you decide to break a lease. Some landlords include an early termination or breach of lease fee in a lease agreement. If you damage the property, your landlord may still have the right to charge you a fee, even if they keep your security deposit. They can even sue you if you don’t pay. Depending on state law, your landlord may also charge you for your remaining rent.
Finally, breaking a lease can hurt your credit score. While this doesn’t translate to immediate bills, a low credit score can make leasing (and other financial tasks) more difficult again.
When do tenants have the right to break the lease?
You have the legal right to terminate your lease without penalty in certain situations, including:
- Active military service: You have the right to terminate your lease without penalty if you have to report elsewhere for work. You must give your landlord one month’s notice and provide a copy of your prescriptions.
- Interference with quiet enjoyment: Each tenant has the right to quiet enjoyment. In other words, your landlord cannot come when they want to. Homeowners are usually required to give at least 24 hours’ notice before showing up for a repair or inspection. If your landlord denies you the right to live in the accommodation undisturbed, you can terminate your lease without penalty.
- Uninhabitable unit: The owners must provide a living unit. If your unit is infested with pests or does not have running water, heating, or doors that lock, the unit is uninhabitable. You can usually interrupt your leave and move without penalty.
How to break a lease and get your deposit back
Even if you do not fall into any of the above categories, you may have recourse to recover your funds. If you find someone to take over your lease, you may not have to pay the costs associated with breaking a lease.
You can sublet or let a new tenant take over the remainder of your lease through a lease assignment. If you transfer your lease to the new tenant, they will have to pay the rent and keep the unit in good repair, not you. If you sublet your home, you may still be forced to pay for damage caused by the new tenant or for any rent they don’t pay. You can collect a security deposit directly from your sub-letter to cover you.
In many cases, a landlord can keep your security deposit if you break your lease early. Knowing when you are and are not entitled to get your money back can help you budget if you need to do something unexpected.