What’s The Difference Between A Lease Termination Charge Vs Reletting Charge?

A lease is a legal contract outlining the terms under which one party agrees to rent a property from a second party. Leases typically outline things like the rent, payment due dates, security deposit, length of tenancy, maintenance responsibilities, rules, regulations, pets, etc. If you break the terms of your lease early, there will likely be fees and penalties to pay as a result. These are called a Lease Termination charge vs a Reletting Charge. If you break the lease by moving before the agreed upon time, you’ll typically be charged a lease termination charge. This is also called an early termination fee. A reletting charge is an estimate by both parties of the reasonable and anticipated costs of reletting the apartment. It’s intended to serve as liquidated damages.

What’s the difference between a lease termination charge vs a reletting charge. A lease termination charge is a penalty you must pay for breaking your lease. A reletting charge, also called a sublease charge, is an estimate for the amount of money it will cost the owner to re-lease the apartment. This can include time, effort, marketing, advertising and hiring a realtor.

Both the lease termination charge and reletting charge should be agreed upon and stated in your lease.

Renting an apartment comes with a few benefits and disadvantages. If you have a lease, you can’t move out whenever you want because you’ll likely be breaking the terms of the agreement. This generally means paying a penalty and the owner’s expenses to lease the apartment to someone new.

In this article, I’ll explain the differences between a lease termination charge and a reletting charge and what you need to be aware of when signing a lease.

What’s A Lease Termination Charge?

A lease termination charge is a fee that you are required to pay if you break the terms of the lease early. Should you move before your lease is up, you’re charged a fee. That fee is outlined in the lease when you sign it. The termination fee allows you to break your lease without having to pay the entirety of rent due for the entire lease term.

Your typically required to pay a lease termination charge for breaking a lease early.
Any fees or charges you’re required to pay for early termination should be clearly stated in the lease.
When you pay a lease termination charge, you should not have to pay the entirety of rent due for the entire lease term.

When a property is sold, a termination fee may be due from the tenant for ending the lease so as not to obstruct the property for the new owner.

A termination fee is an important part of a lease. If a lease is broken, the owner should not have to subsidize or pay for your early move. You’ll be required to pay a fee and likely pay the cost to find another tenant. But you won’t have to pay the entirety of the rent due for the whole lease term.

If you’re signing a lease, look for the section marked “Lease Break” or “lease Termination” or some similar language. This is typically the area where the owner will outline the fees and charges you’ll be required to pay for breaking your lease.

What’s A Reletting Charge?

A reletting charge is a fee you’re required to pay to cover the cost to find a new tenant. The owner is not required to subsidize your early move by paying to find a new tenant on their own. This typically includes the owner’s time and effort to do things marketing and showing the property to new renters.

The reletting charge should be outlined in your lease. Typically it’s a forfeiture of your security deposit and/or a month or twos rent.

A reletting fee and a lease termination charge are completely different things. Just because you pay the early termination fee doesn’t mean you don’t have to also pay the reletting charge. In most leases you have to pay both.

A lease termination charge is a penalty for breaking the lease before it’s up.
A reletting charge is the cost the owner must pay to find a new tenant.

Make sure to check both the early termination fee and the reletting fee before signing a lease. If you should have to break the lease early, you’ll likely be required to pay both.

Lease Termination Charge Vs Reletting Charge?

A lease termination charge and a reletting charge are two completely different things. A lease termination charge is a penalty you have to pay the property owner for breaking the lease early. The amount of the penalty will be stated in your property lease agreement. A reletting charge is the total cost it takes the owner to rent the property. Because you’re the one breaking the lease agreement, you have to cover the costs to lease the property to someone else.

The reletting fee covers the owners total expenses for time and effort to lease the property. This can include marketing fees, advertising expenses and time. If they have to hire a realtor to lease the property, the expense can also be included.

Before leasing a property, you have to sign a leasing contract that outlines the total time period you’ll be leasing the property and how much rent you owe. If you leave the property early and break the lease, there will typically be a penalty to pay. This is is called a lease termination fee.

In addition to the penalty, you also must cover the costs to find a new renter. This is called the reletting charge.

Because of the lease termination fee and reletting charge, you will not typically be required to pay the entirety of your rent payments to the owner. So in many cases, the penalty and reletting fee can be much less than paying the remainder of your lease.

How Much Does It Cost To Break A Lease?

How much it costs to break a lease depends on where you live and the terms of your lease agreement. Typically there’s a set penalty to pay, called a lease termination charge to pay. On average the penalty is one or two months rent. But this can be higher or lower depending on the terms of your agreement.

In addition to the early termination fee, you’ll typically have to pay a reletting charge. This is the amount it costs for the owner to find a new renter.

The owner must make reasonable efforts to re-rent the property, no matter what your reason for leaving. This is why you’re typically not responsible to pay the total remaining rent due under the lease. So you may not have to pay much additional rent if you break your lease. Most locations require landlords to take reasonable steps to keep their losses to a minimum, or to “mitigate damages” by re-renting the property instead of charging you the full amount of the lease. However, you usually have to pay the cost to find a new renter.

Make sure you read your lease thoroughly before signing it.
Most leases have both an early termination fee and a reletting charge.
If the owner has to re-rent the property at a lower price, you may have to pay that difference.

It’s required in all States that tenants must inform landlords at least 30 days before moving out. If a tenant move out without giving the landlord prior notice, they may be required to pay the entirety of the lease or for the unrented months plus expenses.

Try to keep these expenses in mind, and read your lease carefully, before breaking it.

Lease Termination Charge

Most leases include an early termination clause which requires you to pay a fee for breaking the lease. On average, it’s 1 to 2 months rent. However, the fee is negotiable and there’s no industry standard or requirement.

Reletting Charge

When you break a lease early, you’re typically required to pay whatever costs it takes for the landlord to lease the property to someone new. This can include marketing, advertising, cleaning and listing fees as well as paying a realtor or broker.

Remaining Rent

If you end your lease early, you’re typically required to pay the rent for any months that the property is not rented. However, during this time the property owner is supposed to be actively looking for a new tenant. This is to prevent the owner from incurring losses because you broke the lease.

Forfeited Security Deposit

Depending on the lease agreement and your reason for leaving, you may be forced to forfeit your security deposit.

Are There Ways To Legally Break A Lease?

A lease agreement is a legally binding contract between a property owner and a tenant. Typically a tenant must sign a lease before moving into a property. The lease legally commits them to live in the property for a set amount of time, typically a year, for a set amount of money. There are also terms, rules and regulations to follow including penalties for breaking the lease.

If the tenant has to move out before the lease ends, there are typically penalties to pay for breaking the lease. This is called a lease termination fee which is one to two months rent on average.
You’ll likely also have to pay a reletting charge, which is the expanse the owner must pay to re-lease the property to someone else. This usually includes time, effort, marketing, advertising and possibly hiring a realtor.
You may also have to pay the difference between the new rent and your if the new rent is lower.

Before breaking a lease, read it carefully and understand how much it will cost you for penalties and fees. Then find out if there are any legal methods for breaking the lease early without paying a penalty. In many states, there are justifiable reasons for you to break a lease without paying penalties and fees.

In the next section, I’ll outline some of the reasons why you may be able to break your lease early, and why not.

Reasons To Legally Break A Lease

In many states, there are legal reasons why you’re allowed to break a lease agreement early. A lease agreement is a legally binding document between you and the landlord, so your reason for breaking it must be justifiable under the law where you live.

By signing the lease, the tenant agrees to live in and typically maintain the property, and pay rent, for the duration of the lease. The lease also typically outlines terms, rules, regulations, penalties and fees associated with breaking the agreement.

Here are some reasons why you may be able to legally break your lease and some that are not acceptable:

Reasons You Can Break a Lease	Reasons You Can’t Break a Lease
Landlord Failure to Maintain Property	Moving for a Job
Landlord Illegally Enters the Apartment	Loss of a Job
Landlord Harasses Tenant or Violates Privacy	Purchasing a Home
Active Military Duty or Change of Station Orders	Getting Married
Victim of Domestic Violence	Disliking the Property
Illegal or Unsafe Apartment	Moving in with a Friend

Keep in mind that these may not be applicable in every state. Check with a lawyer in your state before breaking a lease to make sure you have a legal reason to do it. And make sure to give your landlord at least 30 days notice before leaving.

Ways To Avoid The Lease Termination Charge & Reletting Fee

There are various ways to break a lease early without having to pay a lease termination charge or a reletting fee. They’re worth trying because violating a lease agreement could get expensive.

Find A Replacement Tenant

In most leases, the tenant is responsible to pay the cost to find new renters when they break a lease. This is called the reletting fee. But if you find a new renter that meets the requirements to rent the property, there won’t be any expenses to pay.

In most cases, you have to pay not only the cost for the owner to find a new tenant, you also have to pay for unrented months. This means you could be paying for a property while it sits empty. It’s in your best interest to find a new tenant quickly to avoid paying fees and additional rent.

When the landlord successfully re-rents the property to a new tenant, the old tenant does not have to pay any additional rent.
If the rent is lower than the previous amount, the former tenant typically has to pay the difference. So it’s in your best interest to rent the property to a new tenant for the same amount of rent.

Finding a new tenant yourself before breaking a lease is a great way to avoid reletting fees. However, it may not help you avoid the early lease termination charge. But in my experience, most landlords, which includes myself, will waive the penalty if the transition is immediate and there are no losses.

Subletting

Subletting, or subleasing, is when a person leasing a property rents, a.k.a. sublets, the property to another person. Read your lease carefully if you plan on subletting a property your renting because it’s not always legal to do it. And a lease may contain provisions that specifically prohibits subleasing even if it’s allowed in your area. The new tenant is called a subtenant.

Here are a few things to consider before subletting your rental:

If a tenant is allowed to sublet, they should ensure that subleasing doesn’t violate any of the terms in their lease.
Subletting a property is a great way to avoid paying an early lease termination fee and a reletting charge. Even though you’re moving out of the property before the lease is up, someone else will be paying the remainder of the rent.
In some cases, you may be able to make a profit by subleasing. To do it, simply rent the property for more money per month that you’re paying. You get to keep the balance after your rent is paid to the owner.
Read your lease and make sure subletting is allowed.
Notify the landlord that you’re subletting the property.

Check your lease agreement before subletting to find out if it’s allowed. If it’s not, ask the landlord for permission to sublet anyway. They may allow it rather than having you break the lease.

If you think you may want to sublet a property you’re renting, make sure it’s included in the lease before signing.

Negotiate With The Landlord

From over 20 years experience working in real estate, I’ve found that one of the best ways to get out of a lease early is simply by negotiating with the owner. This is why I recommend renting from small business or an individual rather than a large corporation who doesn’t necessarily care about you. Most small scale property owners just want the property rented and they don’t want to lose money. Typically this means they’ll be willing to negotiate on the lease terms.

Discuss the issue with your landlord and tell them your reasons for leaving early. This is a better solution than trying to skip out on a lease agreement.
Ask them to consider letting you sublease the property even if it’s not allowed in the lease agreement.
Offer to help find a new tenant for them instead of being charge advertising, marketing and real estate fees.
If the lease is almost over they may let you out early without charging you at all.
In some cases, landlords may want to terminate the lease if they can get higher rent from a new tenant.

To improve your chances of breaking the least without facing a penalty and/or additional charges, negotiate with your landlord and present a few solutions. As a property owner myself, I can tell you that I just want the rent paid and the property cared for. If a tenant needs to leave early, I don’t care much as long as there’s a new renter ready to move in right away.

However, if a tenant simply skipped on the lease and didn’t tell me, I would want to reimbursed for the losses. So respect the property owner and negotiate terms to break the lease early.

Ask For An Early Termination Clause In Your Lease?

An early termination clause allows the landlord to legally break the agreement if the tenants break any lease term. This releases the tenants from any future obligations, and the tenants must leave the property. This type of clause is heavily in the landlords favor. However, an early termination clause may also allow the tenant to terminate the lease early if they follow certain rules. This type of clause can be weighted in the tenant’s favor depending on the language in the clause.

If a lease includes an early termination clause which favors the landlord, I would also request one that equally benefits the tenant.

Written Notice: The clause will typically require written notice in a predetermined amount of time to end a lease early. Typically it’s a 30 to 60 day period which gives the owner time to find a new tenant.

Early Termination Fee: The clause may require a fee to to end the lease early. Typically the fee is 1 to 2 months fee. This is called a lease termination charge. But the amount is negotiable so try to get it as low as possible.

If the tenant follows all of the requirements for early termination in their lease, they can break the lease early without having to pay the entirety of the rent payments.