Breaking rental leases

Anonymous · ‎06-16-2008

I broke the lease on my apartment 2 years ago because the crime went up in the area and it became to dangerous to live there. As a result the apartment complex reported that I owe $2700 dollars on my credit report (even though all rent was paid up to date). I never paid off the debt because it was unreasonable and I couldn't afford and they still won't settle on a lesser amount. Can having something like this on your credit hurt your chances of being approved for a mortgage loan? My credit score is 588, and all my collection accounts are paid off and at least 24 months old (except for the apartment). Will the underwriter require that I pay this off before being approved?

Anonymous · ‎06-16-2008

The debt won't do you any favors. Unfortunately, it's large enough it will likely raise eyebrows. The moral of the story: if you do break a lease, be sure you have ironclad justification for it that can stand up in court, because that's where the matter will likely end up.

Did they send it to collections, or did they get a judgment against you?

DallasLoanGuy · ‎06-16-2008

bad news = you have a collection from housing.

good news = if you can provide a decent letter of explanation and back it up with any kind of data, fha can hardly fault you for trying to put your family in a safer place.

2yrs old? if everything else is decent.... no problems.

Retired Lender

Anonymous · ‎06-16-2008

Hi Shaylo85!

By chance do you happen to know how long it took for them to report it?

Just wondering for myself. I might need to break my lease for a job in a new state so I am hoping it takes a while for something like that to report. My plan would be to purchase a home within 4 to 6 months of the move...

Thanks!

Lel · ‎06-16-2008

@Anonymous wrote:
Hi Shaylo85!

By chance do you happen to know how long it took for them to report it?

Just wondering for myself. I might need to break my lease for a job in a new state so I am hoping it takes a while for something like that to report. My plan would be to purchase a home within 4 to 6 months of the move...

Thanks!

Before you assume that you are going to be penalized for breaking your lease, speak to the landlord and explain the situation. Also, familiarize yourself with the tenant-landlord laws in your state, as these might provide you with some protections.

In California, for example, there are laws that require landlords to make a good faith effort at re-leasing the apartment if a lease is broken. They must advertise the unit and make efforts to show it prospective tenants. The landlord may not attempt to rent the place out for a higher rent that you are paying. If they fail to do this, then tenant might be freed from any obligation to pay the rent for the remainder of the lease. Also, you can try to find someone to take over your lease. So long as this prospective tenant passes muster (i.e. credit check, references, etc.), then the landlord is obligated to accept the replacement.

Anonymous · ‎06-17-2008

I provided my mortgage counselor with police reports and a police crime census report from that particular apartment complex while I was living there so they said hopefully it would help. Before I moved I talked with the landlord about security in the complex b/c I also work in law enforcement. I felt very insecure living there b/c I was a sheriff and a single mother. I was always afraid someone would kick my door to steal weapons or equipment. The landlord never did tighten up security and right before I broke the lease their was a shooting in front of my building, someone was actually killed and my front window on my car was busted out.

So I did provide the underwriter with all of that info with a statement to justify why I left. The account is still in collections as of right now. I broke that lease June 2006 and they didn't report it to my credit report until August 2006.

Anonymous · ‎06-17-2008

I know this doesn't help your credit situation, but I just wanted to say that credit report or not, you obviously made the right decision for yourself and your child to get the heck out of there. I have previously worked in leasing for a large complex...relatively upscale, but we suddenly had a few rounds of break-ins. Our complex manager actually let all those folks out of their lease with a 60 day notice period. I understand business is business, but is there anyone at the top you can talk to? If you get ahold of corporate and show them all of the information you provided to obtain a mortgage, you may get the right person that is willing to have them remove the entry from your credit report. It's worth a try!

Anonymous · ‎06-17-2008

What is the SOL in you state???...apartment complexes are know for suing...and if you get a judgment...that would be far worst than a collection...

Apartment complexes in different states...are different...when I was in Louisiana...all you had to do was pay a month in advance...to break a lease...

Now in Texas...if you leave before the lease is up...you are liable for the remainder of the lease...I think that is RIDICULOUS...and that remaining lease amount...is added to your reports...