Last Updated on December 23, 2012
It’s that magical time of year when I’m asked to sign a new lease at my apartment complex. But this time around, there is a new change that I wanted to run by all of you to get your opinion.
Most apartments I’ve had any dealings with charge a flat fee of up to several hundred dollars (depending on the monthly rent amount) for breaking a lease along with 30 days notice, which means that in addition to whatever the fee is, you’re still responsible for one more rent payment.
Not my complex.
Their fee for breaking a lease is $1,000 plus 60 days notice. This means that if you were to get a new job, lose your current one or suffer some kind of emergency that might require you to relocate, you’d be responsible for that thousand bucks plus two months’ worth of rent.
Before I go any further, I’ll point out the obvious: sure, I understand that breaking the lease isn’t ideal. However, given the state of our economy, where the feeling of the presence of nearly any guarantees have long since gone by the wayside, being forced to break a lease is perhaps more of a real possibility than it used to be.
When you sign that lease, you’re committing yourself to the consequences of what may happen, even if it winds up being beyond your control.
Many apartment complexes go a step farther; they quote you a price for an apartment — let’s say, $700 per month. When you sign the lease, you notice that the price is actually $750 per month, but as soon as you begin to protest, the leasing agent hands you an addendum that explains you’re being given a $50 concession per month; you pay $700, but if you break the lease, you’ll still have to pay the monthly concession amount for the remainder of the lease. So if you are two months into a twelve-month lease and you end up having to break it, you’ll pay $50 times 10 months, for a total of $500, in addition to the lease buyout amount and the notice your landlord requires.
My complex also does the concession thing.
But not, apparently, that isn’t enough. I was advised earlier today that they’re doing away with the $1,000 buyout penalty. I knew that this sounded too good to be true, and I was right: they’re now replacing that $1,000 fee with a two-month rent penalty.
This means that to break the lease, I’d have to immediately pay the equivalent of two-months’ rent, which is well more than $1,000, plus any remaining concessions, plus those two months’ worth of rent that is covered under the 60-day notice requirement. It’s not that I’m setting out to try to break the lease, but at the same time, we all have to face the reality that there’s no way to know what’s coming around the corner that might force you to do so.
And if something like that happens, it’ll likely be at the most inconvenient time…like the day after you renew. Life’s funny like that sometimes.
How many of us have four months’ worth of rent or four months’ worth of mortgage payments sitting in the bank doing nothing waiting to be handed over happily? (The question isn’t how many of us would like to, but how many actually do.)
I think you’re getting screwed, but then you already knew that. It seems apparent to me that these “concessions” are just ways of taking advantage while making it seem like they’re doing you a favour.
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The way my lease works is, I have to give 30 days notice. There is no penalty for breaking the lease. I had to provide a security deposit, of course, which was about one and a half month’s rent. I get the security deposit back in full if I return the keys, have no outstanding rent, and the apartment is in good condition upon leaving.
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I wouldn’t agree to a breaking-of-lease penalty. I understand a 30-day warning, but that’s it. If you are suddenly in a situation which means you have to move out quickly, the odds are that paying such hefty penalties are going to make your situation, whatever it is, even worse. It can mean turning a bad situation into a catastrophic one.
@patricksplace This is common practice. Companies capitalize on the fact that there is a large renter nation nowadays. I can give you tips.
@MsMin I’d love to have them. I’m preparing counter-offers, but I just don’t see signing their terms as is. Outrageous even in this market.
@patricksplace Q: Do you feel sure you will need to utilize a buy out clause? Consider a shorter term lease option?
@MsMin There’s definitely a chance. The shorter term option means paying a good bit more — up to $100s more — per month, unfortunately.
@MsMin I agree that concessions & buyout fees are common practice. My problem is the AMOUNT of the buyout. Excessive even for this area.
Wow. Â That’s a lot.Â
I’m a landlord but we only have 2 units so it is a different situation than an apartment complex but I’ve never heard of such a high penalty for breaking a lease. Â
We allow our tenants to rent month-to-month as a courtesy if they’ve been with us for a year with no problems. Â If they are renting under the yearly lease and wish to break it, they owe us a penalty that equals one month’s rent. If they are renting month-to-month, then they need to give us 30 days notice or will owe us an extra month’s rent.
To be honest, I’ve never heard of a concession and I wonder if that just isn’t common in our area of the country. Â
Again, though, we aren’t looking to make a lot of money off our rental units, just cover costs, so we might run things a bit differently than your complex is run for that reason.
Wow. Â That’s a lot.Â
I’m a landlord but we only have 2 units so it is a different situation than an apartment complex but I’ve never heard of such a high penalty for breaking a lease. Â
We allow our tenants to rent month-to-month as a courtesy if they’ve been with us for a year with no problems. Â If they are renting under the yearly lease and wish to break it, they owe us a penalty that equals one month’s rent. If they are renting month-to-month, then they need to give us 30 days notice or will owe us an extra month’s rent.
To be honest, I’ve never heard of a concession and I wonder if that just isn’t common in our area of the country. Â
Again, though, we aren’t looking to make a lot of money off our rental units, just cover costs, so we might run things a bit differently than your complex is run for that reason.