As a renter, you might need to break your lease if you find a home you want to buy.
If you’re considering breaking your lease to buy a house, the good news is that it’s often possible. The specifics of your situation will have a big effect on the question of whether you can break your lease if you buy a house.
Let’s take a closer look at how to get out of a lease. Plus, explore whether breaking an apartment lease to buy a house is the right move for you.
Key Takeaways:
- In some cases, you can break a lease to buy a home.
- Communicate the situation with your landlord to find solutions.
- Be prepared to incur some financial penalty for this decision.
How Easy Is It To Break a Lease?
When you sign a lease agreement, you’re entering a legal contract that you’re obligated to uphold. In general, you’ll only be able to break the lease under specific circumstances outlined in the document, or with the agreement of the other party.
6 Ways You Can Get Out of a Lease To Buy a House
How you can get out of a lease depends on the circumstances. The exact terms of the lease will outline which pathways are available to you.
If you want to break a lease, explore some of these options below.
1. Ask your landlord
“Approach the landlord or property owner and explain your situation honestly,” says Brett Johnson, owner of Cash For House Pro, a real estate investment company in Denver. “They may be understanding and willing to negotiate an early termination or other alternative arrangements.”
A landlord might not always honor your request — but it never hurts to ask.
Personally, I took this approach when purchasing my first home. The landlord let us out of the lease a few months early because he wanted to renovate our apartment. It turned into a win-win situation, with both parties happy to end the lease.
2. Enact a homebuying clause
Some leases include a homebuying clause that lets you break the lease if you’re buying a home.
A homebuying clause isn’t standard language in lease agreements. You’ll likely need the foresight to ask for one to be included in the lease before you sign it.
If you have this clause in your lease, getting out of it might be as simple as giving your landlord sufficient notice.
3. Buy out the lease
Buying out the lease means you pay the landlord the remaining amount due on the lease to satisfy your end of the contract. For example, if you’re expected to pay $500 per month for two more months, then you could pay the landlord $1,000 and walk away from the situation.
Some leases include a buyout clause, sometimes called an early termination fee. With a buyout clause, you might not have to pay out the rest of the lease. Instead, the lease agreement might allow you to walk away after paying a set fee. Typically, this fee is equal to at least one or two months’ worth of rent.
4. Switch to a monthly agreement
“Oftentimes, my buyer clients will simply be upfront with their landlord when they begin the house search and ask if they can be put on a month-to-month situation at the end of their original lease term,” says Beverly Burris, a Realtor in Charleston, South Carolina. “If a tenant is dealing directly with the landlord and not a big property management company, they often have more success with this. Landlords are people too and everyone knows how tough the housing market is for buyers right now.”
5. Sublet your rental home
If your landlord isn’t open to the idea of letting you out of the lease, and you have no legal recourse in your contract, then subletting your apartment is a possible solution.
When you sublet an apartment, you remain responsible for the rent payments and the actions of the new tenants. The upside is that the subletter will cover some or all of the rent payment. If you choose to sublet the space, it’s a good idea to carefully screen the subletter. You’ll want to be reasonably confident that the subletter will pay rent on time and keep the apartment in good condition.
Just remember, in most states, you’ll need to get your landlord’s permission before letting someone else move into the apartment.
6. Re-rent your rental home
Re-renting the rental home comes with less risk than subletting. Unlike subletting, which leaves you ultimately responsible for paying rent and the condition of the property, re-renting lets you out of the lease.
The process of re-renting your rental home will look different depending on your landlord. In some cases, the landlord will expect you to help them find a new tenant. In other cases, the landlord will find a new tenant entirely on their own. When a new tenant signs a new lease for the property, you can walk away from your lease with no strings attached.
Landlords tend to be more open to this arrangement because it gives them an opportunity to raise the rent. And from your perspective, helping the landlord find a new tenant might be worth it if you can get out of the lease.
Pros and Cons of Breaking a Lease To Buy a House
Every financial decision has advantages and disadvantages. Here’s what to consider when breaking a lease to buy a home.
Starting with the pros:
- It never hurts to ask. In the best-case situation, your landlord will happily agree to break the lease. With that, you might be able to walk away with no financial penalty.
- Move into your dream home. If you are ready to dive into homeownership, breaking your lease might be the final hurdle.
Now for the cons:
- Financial costs. In some cases, the landlord might require you to pay a significant fee to get out of the lease. This could impact your ability to keep up with the costs of your new home.
- Potential harm to future rental options. If you decide to rent again, a new landlord might want a reference from your old landlord. If you broke the lease, your old landlord might not provide a glowing recommendation.
Tips for Breaking a Lease To Buy a House
If you want to break your lease to buy a house, keep in mind these tips:
- Read the lease carefully. A clear understanding of the lease agreement can help you spot easy ways to get out of the lease, such as a homebuying clause or buyout option.
- Communicate with your landlord. Some landlords will help you get out of the lease. In some cases, the landlord might even have plans to renovate or sell the property, which could mean they’re eager to help you move forward with your homebuying plans.
- Get everything in writing. If you come to an oral agreement with your landlord about getting out of the lease, request it in writing as soon as possible.
- Keep documentation. Don’t lose any paperwork related to your lease. Keep all of your lease-related documents in an accessible location.
- Enlist professional help. If you think that your landlord is breaking any rules, consider reaching out to a real estate lawyer for help. A competent professional should be able to help you sort through a potentially messy process.
FAQ: Breaking a Lease To Buy a House
Here are answers to some common questions about breaking a lease to buy a home.
If your lease has an early termination clause, you must provide your landlord with sufficient notice to break the lease. The notice must be given in writing. Be prepared to pay any early termination fees.
You may be able to break a lease in California without a penalty if you are a service member with a qualifying job move, if you are the victim of domestic violence, or if the unit violates health and safety codes.
Open and honest communication with your landlord might help you avoid any lease-break fees. Another option is to work with the landlord to find a new tenant to take over the lease.
The Bottom Line on Breaking a Lease To Buy a House
Breaking a lease to buy a house is an option. If you’re ready to move forward with a home purchase, you have options for getting out of your lease early. Although many of the options involve a financial cost, achieving homeownership might be worth it to you.
