Even if you think you know everything there is to know about your security deposit, one situation may come with new questions: breaking a lease early. If you break your lease, do you lose your deposit? Can a landlord keep your deposit for breaking the lease if they make your unit uninhabitable? Here’s what every renter needs to know.
Can a landlord keep your security deposit for breaking the lease?
Security deposits are a constant when it comes to renting. Typically equal to one or even two month’s rent, the security deposit acts as a backup for a landlord if their renter skips out on payments or damages the property. While you’ll often get all or part of your security deposit back, certain situations do exist where landlords can legally withhold all or some of your security deposit funds. Common reasons for a landlord to keep your security deposit include:
- You cause extensive property damage.
- You leave the unit in a state that requires excessive cleaning.
- You miss rent payments.
- You leave utility bills unpaid.
- You break your lease early.
So, the simple answer to the question, “Can a landlord keep your security deposit if you break the lease?” is yes. However, every renter should know the details of why a landlord can keep a typically refundable rental deposit in these cases — and situations when renters can legally break their lease.
What happens when you break your lease early?
Whether you sign a month-to-month agreement or a lease for a whole year, you agree to pay rent for that period of time. But life can interfere with the best plans. Maybe you find your dream job, but it’s in another state. Maybe you decide to move in with your partner in another apartment, or a break-up means you need to move out of your shared place. Maybe you even need to break up with a horrible roommate.
No matter what good reason you have for breaking your lease, doing so means your landlord needs to find a new renter, deep-clean the property, and more. They’re not getting the cash flow they anticipated. Thus, many landlords use your security deposit to cover costs that come from your early departure.
What information should a lease agreement include?
Check your lease agreement if you’re thinking about breaking your lease. Most agreements have an early lease termination clause. Without this clause, your landlord may not have the right to withhold your security deposit.
An early termination clause includes:
- Mandatory notice period: Your lease should state the number of days’ notice you need to give for early termination of the agreement.
- Renter’s financial responsibilities: Your lease should clearly say what you must pay and when you must pay it. For example, a lease should state if you need to pay rent covering some or all of the remaining rent owed during the lease term if you don’t give sufficient notice.
- Security deposit: Your lease agreement must state that your landlord can keep all or some of the security deposit if you break the lease early.
If the lease doesn’t state this information, you may have a legal case for getting your deposit back. In addition, the lease termination clause and lease agreement overall must follow local and federal housing laws.
That said, your signed lease represents a contract between you and your landlord. If you break that contract, the law typically holds you responsible for paying what you agreed to pay when you signed the lease.
Are there other costs to keep in mind when breaking a lease?
You’ll want to consider some other factors beyond whether or not you recoup your security deposit when deciding to break a lease. Some landlords include an early termination or lease-break fee in a lease agreement. If you damage the property, your landlord may still have a right to bill you for costs even though they keep your security deposit. They may even sue you if you don’t pay. Depending on state law, your landlord can also bill you for your remaining rent.
Finally, breaking a lease may hurt your credit score. While that doesn’t translate to immediate bills, a low credit score can make renting again (and other financial tasks) harder.
When do renters have a right to break the lease?
You have a legal right to break your lease without penalty in some situations, including:
- Active military duty: You have the right to break your lease without penalty if you need to report somewhere else for duty. You must give your landlord a month’s notice and provide a copy of your orders.
- Breach of quiet enjoyment: Every renter has the right to quiet enjoyment. In other words, your landlord can’t just pop in any time they want. Landlords typically need to give at least 24 hours notice before coming in for a repair or inspection. If your landlord deprives you of the right to live in the unit undisturbed, you can break your lease without penalty.
- Uninhabitable unit: Landlords must provide a habitable unit. If your unit has a pest infestation or doesn’t have running water, heat, or doors that lock, the unit is uninhabitable. You can usually break your leave and move out without penalty.
How to break a lease and get your deposit back
Even if you don’t fall into one of the above categories, you may have some recourse to get your funds back. If you find someone to take over your lease, you might not have to pay costs associated with breaking a lease.
You can sublet or have a new renter take over the remainder of your lease via a lease transfer. If you transfer your lease to the new renter, they’ll need to pay rent and keep the unit in good condition, not you. If you sublet your place, you might still get stuck paying for any damage the new renter causes or any rent they don’t pay. You can collect a security deposit directly from your subletter to cover yourself.
In many cases, a landlord can keep your security deposit if you break your lease early. Knowing when you do and don’t have a right to get your money back can help you budget if you need to make an unexpected move.