Your Home: The Do's and Don’ts of Breaking a Lease

November 14, 2004
By JAY ROMANO

FOR most renters, few things are more reassuring than a freshly signed lease. But what happens when a tenant has to end the tenancy before the lease ends?

"This is a question I'm asked quite regularly," said Lucas Ferrara, a Manhattan lawyer who is publisher of The Landlord-Tenant Monthly, a lawyers' newsletter. "And the answer is there is no easy answer."

Mr. Ferrara explained that a lease is a contract between the landlord and the tenant. And, as with most contracts, a lease can be terminated only with the consent of all parties. So, he said, the best way to end a lease early is to get the landlord's consent. "The landlord's reaction will likely be a function of market forces," he said. "If the landlord can get a higher rent from another tenant in a short time, he's more likely to let the existing tenant off the hook."

In New York, Mr. Ferrara said, it is more likely that a rent-stabilized tenant will be let off the hook than a tenant with a market-rate apartment. Under rent stabilization, he said, when a tenant vacates an apartment the landlord is entitled to a vacancy increase of up to 20 percent. So when an existing tenant wants to terminate a rent-stabilized tenancy, the landlord is virtually guaranteed a higher rent from the next tenant.

Sometimes, he said, it may be possible for the landlord to spend enough money on improvements to allow him to increase the rent above $2,000, which under the law removes the vacant apartment from regulation.

With free-market tenancies, he said, it is less likely the landlord will consent to early termination, since the apartment, presumably, is already rented at the market rate.

When a landlord does not consent to a tenant's request to terminate a tenancy early, the tenant who does so anyway takes a significant risk.

David Ng, a Manhattan landlord-tenant lawyer, said that virtually all leases make tenants responsible for paying rent for the full term even if the tenant vacates the apartment. But he noted that there is one way a tenant may be able to terminate a tenancy without liability.

"The state's Real Property Law has a provision that allows you to ask the landlord for consent to assign the lease to a substitute tenant," he said. "And the landlord cannot unreasonably withhold his consent." (If you merely sublet, you're still liable.)

He noted that the law does not require the landlord to accept the substitute tenant - "but if the landlord rejects the assignment without good cause, he has to release the current tenant from the lease." (It would be up to a court to decide whether the landlord was unreasonable.)

Tenants who terminate early, and who fail to assign the tenancy, will almost certainly be obligated to pay the landlord any money he loses. But depending on where the tenant lives, the landlord may be required to try to re-rent the apartment and reduce the amount the original tenant is responsible for.

Mr. Ng said that as a result of an appellate court ruling, landlords in Brooklyn, Queens and Staten Island are required to make a reasonable effort to find a new tenant. If one is found, the amount the original tenant is responsible for is reduced. So if a tenant breaks a lease with six months left, and the landlord finds a new tenant two months later, the original tenant would be responsible for the two vacant months, plus costs incurred in re-renting.

But, Mr. Ng said, an appellate court with jurisdiction in Manhattan and the Bronx has ruled that a landlord has no duty to mitigate damages. In those boroughs, he said, "if you break the lease six months early, the landlord can just leave the apartment vacant and hold you responsible for the entire balance."