There are myriad things first-time homebuyers must consider before making an offer on a home—getting approved for financing, collecting a down payment, determining what type of home suits their needs and lifestyle. Another consideration, coming as many do from rental situations, is deciding when to move, and whether to break a lease to purchase a home.
While most tenants intend to stay for the full term of the lease when they sign it, life sometimes has other plans, and the right time to buy may present itself before the lease terminates. We’re all familiar with the objective of a lease: it obligates both tenant and landlord for a set period of time, usually a year, and limits the landlord’s ability to change the rent or other terms (included utilities, for example), unless stipulated within the lease, until the lease terminates. A tenant has the legal right to remain in the unit unless the lease terms are violated, such as failure to pay rent.
Leaving before a fixed-term lease expires without paying the remainder of the rent due under the lease is called breaking the lease. The legal experts at Nolo.com indicate that, while landlords in most states must make a reasonable effort to re-rent their units when a tenant breaks a lease, landlords in Minnesota (Control Data Corp. v. Metro Office Parks Co., 296 Minn. 302 (Minn. 1973)) do not have the same responsibility. Under Minnesota law, landlords aren’t required to “mitigate damages” by trying to rent their property in a timely fashion to keep losses to a minimum if the tenant moves before a lease ends.
If it’s necessary for a tenant to break the lease and move out without a legal justification (described as beginning active military duty, being a victim of domestic abuse or harassment by landlord, or living in unsafe conditions), the tenant may try coming to a mutually-acceptable agreement with the landlord. Nolo.com suggests the best course of action is clear communication: providing the landlord with as much notice as possible and writing a sincere letter explaining why it’s necessary to leave early. Ideally, the tenant could offer the landlord a qualified replacement tenant with good credit and references, to sign a new lease.
With all that said, however, the landlord may not be amenable to finding a replacement tenant, in which case the current tenant would still be legally bound to fulfill the obligations of the signed lease, i.e. paying the remaining months’ rent.
As with any part of the home-buying process, preparation and foresight is key, and can save thousands down the road. If you’re currently renting and thinking about purchasing a home, review your lease, discuss your options with your landlord, then decide if the time is right. If paying months of rent in a lump sum will eat into your down payment, it may be better to wait until the lease is terminated. If your landlord is willing to sublet, or if you’re on a month-to-month agreement, timing may be right for you to begin the home-buying process!
Angela Anderson, Realtor—Helping First-time Homebuyers Gain a New Lease on Life
Results Support Services, Working with HomesMSP Team and RE/MAX Results in the Twin Cities—Sharlene, John, Angela
