How to get out of a lease

How to get out of a car lease earlyEverything that happens in your life will not always be under your control — you can suddenly lose your job, develop serious health complications, have to move far away for a job, or have a sudden death in your family. Any of these big events can have a serious impact on your finances, and give you a valid reason to want to end your car lease before it is over. If you do not know all of the options available to get out of your car lease early, we wrote this guide to help explain how to do it.

#1 — Transferring a Car Lease

Arguably, the best option available to most people is to transfer their car lease to someone else. If you can find someone who is willing to take over your lease, it is the option that will cost you the least money and have zero financial impact to you. However, it does take some work to find someone and then go through the steps to make the transfer.

If you’re wondering why someone else would want to take over your lease, it is because they can get all the benefits of leasing the car without some of the extra costs. For example, if you made a bigger down payment to reduce the monthly payments, when someone else takes over the lease they get the lower payments without having to make the down payment. It allows people to get into a lease and usually get a better deal out of it. The downside is the lease will be for a shorter term, but that might also be what they want.

Here is a basic summary of how the lease transfer process works:

  • Find someone who is willing to take over your lease for the remaining term and payments
  • Get the new person approved for the necessary credit to take over the lease by you AND the leasing company
  • Pay necessary lease transfer fees to the bank, dealership, and/or manufacturer
  • Get the new person licensing for the vehicle
  • Fill out the necessary lease transfer paperwork

Depending on the manufacturer of your vehicle, there might be some restrictions on transferring your lease — some will place liability on the original lease owner if the person taking it over fails to make payments, some do not allow you to transfer it within the first 12 months of the lease, and so on. Make sure you read your lease contract thoroughly to check for any restrictions for transferring a lease so you know it is worthwhile.

Thankfully, there are businesses and websites that make transferring a car lease much easier. Lease Busters is one of the most well-known in Ontario, but there is also,, or They allow you to create a listing with your vehicle’s and lease’s information that people looking to take over a lease can browse through. It makes the job of finding someone to take over your lease very easy, and they are able to help guide you through all the financial and legal paperwork required. Some will even work with the leasing company to help handle some of the details.

In the end, the process is usually fairly straight forward:

  • Pay a fee to have your vehicle listed on their website
  • Speak on the phone with their analyst to answer questions about your vehicle and situation
  • Fill out a form answering questions on your vehicle (year, make, model, odometer) and your lease (monthly payment with taxes, without taxes, annual km limit and penalty, etc.)
  • Take photos of your vehicle and write a basic description of its features and options
  • Respond and negotiate with people interested in taking over your car lease

Once you get to the negotiation phase, the person offering to take over your lease is allowed to ask for things like including winter tires, you paying all of the lease transfer fee, an additional cash down payment, and so on. It is up to you whether or not you agree to any such negotiations. However, if you have a great lease with a low interest rate and monthly payments and your vehicle is in good condition, you can also try negotiating with them. You can see if they’ll pay the lease transfer fee, or pay for the winter tires, and so on.

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This puts you somewhat at the mercy of the other party’s cooperation, so the process can be as difficult or as easy as they are willing to be. However, you always have the option to cut all communication if they become too difficult about it. Once you reach an agreement with someone, the basic process for going through the lease transfer process takes over that was listed above.

The whole process through these lease takeover businesses can take as little as a week, from start to finish, depending on how quickly you can seal the deal with an interested buyer. To avoid having to pay another month’s payment, make sure you start the process at the beginning of the month. This should give you enough time to fully complete the process before the next month’s payment comes.

If you are worried about the cost of using these businesses to list your vehicle and assist in the transfer process, don’t be. Their fees are very reasonable, and considerably less than the cost of terminating the lease early. If you are in a rush to get out of your lease for whatever reason, they also help speed the process up considerably. In the end, it is relatively easy, costs the least amount of money than any other option, and gets you out of your lease clean with no impact on your credit score.

Find a New Renter

In many states, both you and your landlord are required to try to find a new renter to replace you if you move out early. In legal terms, this is known as “mitigating the damages” from breaking an apartment lease– in other words, lessening the rent amount still owed for the remaining months.

There are two possible scenarios for finding a new renter: Subletting and re-renting. Here’s a breakdown of each:

  • Subletting: Subletting is when you or your landlord find someone who’s willing to take over your current lease. While they’ll likely sign their own sublease agreement, the lease will still be under your name, making you legally responsible if they smash a hole in the wall or forget to pay rent for a few months. You won’t get your security deposit back until the end of the original lease term, even if you find a subletter, so keep that in mind.
  • Re-renting: Re-renting involves finding a new tenant for the unit, but unlike subletting, they will sign a brand new lease agreement and pay their own security deposit. For the landlord, this often means re-listing your unit and showing the property to interested renters.

If your landlord isn’t able to find a new renter quickly, you may be required to pay for the days the unit remains vacant. Renting your apartment isn’t the landlord’s number one priority, so finding a renter to replace you may help speed things along. Remember, your landlord doesn’t have to go with the first person who wants to sublet or re-rent your apartment. There are a number of things that might keep a landlord from deciding to rent to an applicant, including credit score, rental history, availability of funds and more.

In some states, both you and your landlord are legally responsible for trying to find a new renter. However, since you stand to lose a lot of money if you can’t find one, it’s a good idea to put in a lot of effort from the beginning. Check with your friends or post a Facebook status to see if anyone you know is looking for a place to live!

Know the Exceptions

Every state has different laws when it comes to breaking lease agreements, but there are several that allow a tenant to leave their apartment before the lease term is up if there are special circumstances involved. Some of the most common reasons you may be legally allowed to break a lease without consequences include:

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Landlord fails to maintain the property:

In most states, landlords are required to maintain a fit and habitable property in the following ways:

  • Providing running water at all times
  • Performing repairs
  • Adhering to Health and Safety Codes
  • Keeping all common areas clean
  • Providing proper trash bins

If a tenant believes that there is a significant health or safety violation, they can either make a complaint with their local Department of Public Health, or can attempt to complain to their landlord directly.

  • Complain to Department of Public Health– Contact your local Department of Public Health and Safety to file a complaint against your landlord. They will open a claim and send someone out to inspect the issue. If they are able to confirm your complaint, they will send notice to your landlord requiring him/her to address and fix the problem within a certain amount of days, which varies by state. Make sure to check your local statutes.
  • Complain to Landlord: Most states require landlords to fix a significant health or safety violation within a certain amount of time, with a promise to follow up in the case that the landlord doesn’t comply. In that case, a tenant may be able to legally break their lease. Typically, the tenant is required to provide to their landlord – in writing – some form of a Notice of Intent to Vacate. Depending on state laws, a tenant has to wait a certain number of days after their notice to vacate has been received before they can move out, unless the violation is incredibly severe and detrimental to the residents’ health.

When complaining directly to your landlord, make sure you put it all in writing; You may need documentation/proof in the future if things end up in court.

Illegal Apartment:

If you live in an apartment that’s considered illegal in your state (some states regulate basement apartments, for instance), you may be able to break your lease.

Tenant is Active Duty in the Military:

Members of the U.S. Military are protected under the Servicemembers Civil Relief Act when needing to break a lease early due to change of station orders. In the case that a servicemember is ordered to relocate for a period of at least 90 days, the tenant can legally give notice of their notice to terminate the lease agreement along with proof of their official orders. In most cases, notice must be given at least 30 days before the desired move-out date.

Landlord Illegally Enters Property:

Landlords are generally required to provide tenants with at least 24 hours notice before they have the right to enter the property. Landlords can legally enter your property to:

  • Make Repairs
  • Inspect the Property
  • To Show Property to Prospective Tenants

So what if they enter illegally?

If a landlord repeatedly attempts to or succeeds in entering a property without proper notice, tries to enter for reasons that aren’t legally allowed or harasses a tenant, the tenant may have legal grounds to break their lease. In order to do so, it is usually required that the tenant obtain a court order telling the landlord to stop; If the order is violated, then the tenant can give notice of their intent to terminate the lease.

 Tenant is Victim of Domestic Violence:

In many states, if a tenant has been a victim of domestic violence, they may be legally entitled to break their lease. In those cases:

  • The act of domestic violence must have typically occurred within the last three to six months.
  • The tenant must provide the landlord written notice of their intent to break the lease due to an act of domestic violence
  • Provide notice within at least 30 days prior to moving out.

Landlords are entitled to request proof of the domestic violence, which can include an order of protection or a police report for the specific incident. If granted, tenants are only responsible for rent payments up to the day they vacate.

Unexpected health circumstances, like a serious injury or illness, may also enable you to leave your rental agreement before the lease term is up.

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A lawyer could help you come to terms with your landlord, or they may advise you to file a suit in small claims court. Though court sounds expensive, small claims court isn’t as pricey as other types of legal recourse and could protect you from having to pay an unfair amount to your landlord.

See also: Breaking a Lease: What You Need to Know



This is What Security Deposits Are For

The security deposit (generally equal to two or three month’s rent) is made for situations like this—to compensate you in the event of unpaid rent.

Because most landlords require tenants to pay the security deposit at the same time the lease is signed, it can help bridge the income gap between your tenant’s first few months of rent.

If you have collected the deposit from the tenant, you and the tenant have two options:

  1. You keep it, apply the security deposit toward rent owed until the property is re-rented, and then send the unused portion back to the tenant. The tenant doesn’t pay rent unless the rent owed exceeds the total deposit. This route is risky because it may be difficult to collect or sue for rent from the tenant after the security deposit is used up.
  2. You set it aside and the tenant pays rent each month until the property is rented again. Then, you send the deposit back in full, since there won’t be any damages to the unoccupied unit. This route is safer for you because the tenant has the incentive to pay the rent in order to get the security deposit back in full. If the tenant fails, you can deduct rent from the security deposit anyhow.

How to Sue Your Roommate

You’ll need to check your state law on this procedure, but you’ll probably be able to file a small claims lawsuit to get the money owed to you by your ex roommate. You’ll need to prove that you have a 50/50 agreement (or whatever the agreement was) in order to win your court case.

1. Prove Your Roommate’s Share

One way to prove your roommate’s portion of rent would be if you have written proof, which states what rent amount each party was responsible for. If you don’t have that, and only one of you paid the landlord, you can still prove your portion of the rent with your bank statements, or printouts of rent payments from Cozy. If, for example, you paid the landlord and your roommate paid you their share in cash or direct deposit, you can show the court this regular payment. If you ask, your landlord might help you by telling the court (in person or by a statement) how much you paid each month and how much your roommate paid.

2. Send a Demand Letter

Before you go to court, you might want to send your ex roommate a demand letter, stating what they owe you. The demand letter will also state that if you aren’t paid, then you’ll take them to court. This letter will need to be sent by certified mail. That might be all it takes to get the money you’re owed.

3. Bring the Right Paperwork to Court

If you don’t get your money after sending the demand letter, go to court. You should bring the following:

  • Proof of what you’re owed
  • Your copy of the demand letter (or some other proof that you asked for the money)
  • The lease
  • Your landlord or a statement from your landlord

Bottom Line

Signing a year’s lease is serious business. Although you can’t predict the future, try your best to only sign a lease with people you can trust. If relationships end, then it’s best to respect the lease, and come to some agreement on your own. If you can’t, then it’s okay to discuss your options with the landlord about removing one or both of you from the lease.

Topics:  Evictions, For Renters, Laws & Regulations, Leases & Legal

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