Being able to break a lease without penalty is a concern for many homebuyers.

Many homebuyers, especially first-time homebuyers, have lease commitments that they either have to break or let expire as part of the process of buying a new home.

Can you break a residential lease without penalty? It depends!

First Steps: Read Your Lease!

1. Get (or find) a copy of your lease.
2. Verify the lease term. Is it month-to-month or is there an expiration date? If month-to-month, you can terminate your lease without penalty as long as you give proper notice to your landlord. 
3. Look for any "escape" clauses that would allow you to break the lease for specific reasons, or at least let you "buy out" the lease for an amount less than your normal monthly rent payment.
4. Verify what you paid in advance: Security deposit, last month’s rent, etc.
5. Verify the amount of notice that you’ll need to give before move-out to avoid being charged another month’s rent.

Next Steps: Talking to Your Landlord or Management Office

Keep in mind that the landlord or management office isn’t required to give you a break unless there are provisions clearly stated in your lease for early termination. With this in mind, be sure to approach the management office in a pleasant manner, since you’ll likely need to negotiate somewhat to get what you want.

Many of the larger apartment complexes in the Santa Clarita area will allow the breaking of a lease under certain conditions. They may not let you walk away free of charge, but at least they won’t charge you full rental rates for your remaining lease term. Of course this may depend on the number of vacancies in your building: If it’s fully rented they’ll be more likely to let you out than if there’s a 50% vacancy rate.

Also, be aware of the provisions for the so-called "equity apartments" that advertise that a portion of your rent will go towards the future purchase of a home. Most of these are tied to a specific builder (often KB Home), so if you buy elsewhere then you cannot use this "equity" for your purchase.

Plan Ahead!

If you’re planning on buying your home so your move date coincides with the end of your lease term, then you’ll need to plan ahead.

It will take time to find that perfect home, and then at least 30 days to close escrow. If you’re using FHA financing, then plan on 45-60 days before you’ll close escrow.

This means that you should start looking for your home at least 60 days before your lease expires. You can shorten the process by talking with a qualified lender first and obtaining either a prequalification letter or a pre-approval letter before you start looking for homes. This will help you to target the right price range for your home purchase, and reduce the amount of time spent looking at homes in the "wrong" price range.

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