topic Re: breaking apartment lease in General Credit Topics

breaking apartment lease

Anonymous — Fri, 01 May 2015 05:24:48 GMT

It might be a dumb question, but how bad is breaking a lease and they report it to credit bureaus?

Re: breaking apartment lease

RobertEG — Fri, 01 May 2015 08:09:18 GMT

Many management companies will assign collection of the debt to a debt collector, who will report a collection.

That is a major derog that you want to avoid. It will, unless you can persuade the debt collector to delete, remain in your credit report for approx 7 years from the date that you break the lease.

Re: breaking apartment lease

Anonymous — Fri, 01 May 2015 12:32:24 GMT

This happened to me years ago. I had to move out (big legal order for protection I won't even go into) and my roommate skipped town. It did go on my credit report, but I couldn't pay it at the time. I didn't get into one apartment because of it, but was upfront w other buildings and I've lived in a different place for a few years. However, I never paid it (tsk tsk tsk I know) and didn't acknowledge it either. It's set to fall off soon, but yes, it did go on there. Good luck and things will be okay!

Re: breaking apartment lease

takeshi74 — Fri, 01 May 2015 12:35:32 GMT

@RobertEG wrote:
Many management companies will assign collection of the debt to a debt collector, who will report a collection.
That is a major derog that you want to avoid.

This.

Take a look at the biggest slice:

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

Then click on the link about Payment History. There's a reason why we always recommend addressing derogs first to those rebuilding. While some derogs may have less impact than others you don't want any on your reports.

Re: breaking apartment lease

Anonymous — Fri, 01 May 2015 13:00:21 GMT

I suggest against breaking an apartment lease.

Instead, try to either negotiate a settlement with your landlord or try to find a sub-leaser.

This way your credit score won't get dinged.

Re: breaking apartment lease

cluelessoregonguy — Fri, 01 May 2015 15:06:20 GMT

Some apartment leases let you exit the lease with like 60 days notice. If a similar option is in your lease agreement and you absolutely have to move you may just need to eat an extra month or so of rent to avoid having it show bad on your credit reports.

Re: breaking apartment lease

StartingOver10 — Sat, 02 May 2015 17:55:26 GMT

@cluelessoregonguy wrote:
Some apartment leases let you exit the lease with like 60 days notice. If a similar option is in your lease agreement and you absolutely have to move you may just need to eat an extra month or so of rent to avoid having it show bad on your credit reports.

Breaking a lease is very bad for your credit and it can do very long term damage. This is especially true for the large apartment complexes that have a management team in place and are 'corporately' run.

I am a Realtor and can tell you that if you have a collection or a judgment on your credit or in the public records you will exclude yourself from residency from many apartment complexs and private landlords. Not all, but a larger percentage of landlords will not rent to someone that has a history of eviction. If you break your lease, your landlord has to evict you officially and then get a money judgment. At a minimum you will see a collection. Most of the time I see the whole thing (running background reports): eviction and judgment. The judgment may or may not show on your credit, but it will be in the public records.

You are looking at a minimum of collection for the unpaid rental period and potentially damages to the apartment itself. These complexes have a system in place that charges you for every little thing - even if it is normal wear and tear. They bank on you not knowing that normal wear and tear should be excluded from their charges. And naturally you don't have a leg to stand on unless you can prove it in small claims court.

The worst thing is this: these complexes determine their value by the rental income + some percentage of collection of outstanding accounts. Most of the professional landlords go right for a judgment. When the judgment falls off your report, it still can be collected (unless it is paid) because judgments last for 10 years or 20 years and can be renewed until collected in many jurisdictions. That is very long term. Look up your state's statutes so you know which term applies to you and review the applicable renewal terms. It is a very big deal to you.

I would do as the poster in red above suggests: work out an agreement with the landlord and get it in WRITING. Then pay it and keep it forever if possible.

Don't trust the landlord to have a copy of your records. Especially since there are so many sales of these complexes the records become unavailable to the previous tenant.

It will substantially hurt your ability to get future rentals and also hurt your chances of purchasing a home. It is a huge red flag for any mortgage lender.

Re: breaking apartment lease

Anonymous — Sun, 03 May 2015 02:08:05 GMT

@cluelessoregonguy wrote:
Some apartment leases let you exit the lease with like 60 days notice. If a similar option is in your lease agreement and you absolutely have to move you may just need to eat an extra month or so of rent to avoid having it show bad on your credit reports.

This.

I just did this. Got an oppoptunity to transfer with my company to another city. Put in my 60 day notice, with mine I had to pay the rent that was due and pay another month at the end of the 60 days. That was the 'penalty'. My lease had the buyout written into it. Paying double rent for a couple of months sucks but its what you have to do if you choose to break the lease. I didn't want to pass on the opening I had so I just dealt with it.

OP, have you looked to see if your lease has a buyout clause?

Re: breaking apartment lease

Kirmie2010 — Sun, 03 May 2015 03:30:40 GMT

I dont know why everyones telling you its bad. Its only bad if you dont have an opt out clause in lease, cant transfer lease to someone else or dont pay the bill. Most leases have a early cancellation fee or guidelines for how they go about it. Really nice leases will let you have someone else submit an application with your landlord and sign all the paperwork, then your lease is transferred.

You must pay (most places) the 2x rent or 1.5x rent to break the lease. Look through your papers, everywhere Ive lived (a few different states) all have a early lease cancellation option. Most people dont do it because you pretty much end up paying for an extra month but not live there so they can fix it up and get it ready to rent.

If you have the option in your lease and pay the 2x or so rent fee associated with it, no problems at all it wont go on your report and your fine.

If you break it and dont have a clause in your lease, thats bad. If you break it and dont pay, thats bad and will go on your report and will make finding a new place harder.

*edit*
Woops sorry, pretty much said the same thing as the poster above me I had the window open for like 2 hours before replying.

Re: breaking apartment lease

Anonymous — Sun, 03 May 2015 05:15:51 GMT

It does have a buyout clause. When we resigned our lease we new we would be moving in about 6 months, so the lady in the office said a 60 day notice would be fine, now she is gone and the new lady said, you have to give 69 day notice and still pay buyout. After telling her what previous lady told me, she said that she no longer works here and this the policy.
I wonder if calling management company would help? Spent a full year building my credit, rebuilding, hate to let this hurt me but 2300 dollar buy out is unacceptable.
By the way, we just closed on house is why we moved.

Re: breaking apartment lease

StartingOver10 — Sun, 03 May 2015 06:19:43 GMT

Your lease will have the specifics written right in it. Read your lease. Oral statements can't overcome the written lease.

Re: breaking apartment lease

Anonymous — Sun, 03 May 2015 13:08:17 GMT

@Anonymous wrote:
It does have a buyout clause. When we resigned our lease we new we would be moving in about 6 months, so the lady in the office said a 60 day notice would be fine, now she is gone and the new lady said, you have to give 69 day notice and still pay buyout. After telling her what previous lady told me, she said that she no longer works here and this the policy.
I wonder if calling management company would help? Spent a full year building my credit, rebuilding, hate to let this hurt me but 2300 dollar buy out is unacceptable.
By the way, we just closed on house is why we moved.

The buyout clause will be listed in the lease. It is independent of whatever either lady told you, unless the lease gives them the opportunity to amend it without notice. In that case, you would need a new copy of it.

Re: breaking apartment lease

Anonymous — Sat, 09 May 2015 04:35:42 GMT

Yes buy out is two months rent due at leaving. They told me today that they would break it up into 3 payments. It just sad that people tell you something then do another. Took me 12 months to go from 490 to 660, and now this. Pay now or pay later!

Re: breaking apartment lease

StartingOver10 — Sat, 09 May 2015 05:00:39 GMT

@Anonymous wrote:
Yes buy out is two months rent due at leaving. They told me today that they would break it up into 3 payments. It just sad that people tell you something then do another. Took me 12 months to go from 490 to 660, and now this. Pay now or pay later!

Congrats on getting your score up. Don't ruin it now by now failing to pay the $2300 on the apt lease - it will take a long time to recover. I know it isn't what you want to hear, but better to take care of it now before a derog hits your reports.

Re: breaking apartment lease

ttleigh — Sat, 09 May 2015 08:26:08 GMT

I would also check with your local housing authority. Where I live landlords can only charge "reasonable fees" if you end a lease early. Meaning they can charge for rent, advertising the place and the costs associated with showing BUT in my community the rental market is hot so if you find a qualified tenant yourself, they can't charge a lot of those fees. It cost me $300 to end my lease on my apt because I found the new tenant.