Real Estate Flipping

Most leases have a section regarding the renter breaking the lease. So it is also likely a section or several sections regarding when the leasing agent can evict the tenant, the section on breaking the lease should be of particular interest to those who might be in a position having to break the lease some day. Renters should understand these contract terms so they can make an informed decision. In addition, the tenant must take account of all costs associated with breaking the lease. This includes the financial costs and emotional costs.

Understand the terms of the contract

Renters should review their lease before signing this document. The lease is a legally binding document which should be duly taken into consideration before concluding the agreement. This is important because understanding these terms will be essential if the need to break the lease becomes a reality.

Leases generally allow the tenant does break the lease but not without some form of sanction. This penalty is usually in the form of requiring the tenant to give a specific amount of notice before the contract is in place and also requires the tenant to pay a sum of money to break the lease. A notice of 30 days and a lease break amount equal to one month's rent are common penalties SDA associated with breaking a lease, however, leasing agents may impose individual sanctions are more severe or less severe.

Consider costs of breaking the lease

As mentioned previously there is usually a charge associated with breaking a lease. This fee is usually equal to one month's rent participant. While paying this fee may seem excessive there are some cases where it is an economically good decision to break the contract, even if there is a financial penalty imposed.

Take the example of an owner which is the process or moving due to job change. The owner can choose to rent an apartment in the new state while the house is sold in the previous state. If the tenant enters into a contract of 12 months under the assumption that it will take long to sell the old house and buy a new home, you may be surprised if his other house sells quickly and he finds a home in new state fairly quickly. All this can happen in a matter of 2-3 months.

The lessee has the option of staying in the apartment until the lease expiration approaches, and then start looking for a house. However, this option carries the risk that the house he had previously considered unlikely to be available. The option of other tenants is placing a bid on a new house and plan on breaking the lease if it is able to close on the new house. In this case, the tenant would be faced with both a rent and a mortgage for 9-10 months. It will probably be much more expensive than the price the tenant should pay for breaking the lease.

Breaking the lease is not always a financial decision

The decision to break a lease may not be completely one financing decision. Sometimes there are emotional components which factor into the equation. For example, a tenant may have only 1-2 months remaining on its lease when it is offered a dream job that will require him to relocate immediately. Although breaking the lease at the end of the agreement is usually not financially wise, the tenant can make the decision to avoid missing a dream job.