Every Landlord’s Hidden Weapon: The Buy-Out Clause
Most prospective tenants rush into signing an apartment leasing agreement without taking much time to read into it. At lease signing, landlords provide all kinds of paperwork and make it seem like it’s nothing, but semantics and oftentimes just tell you what it means, verbally. They don’t necessarily try to hide anything from you, but they don’t try to expose their hidden weapon on purpose, which is the buy-out clause. Every now and then people’s lives take unexpected turns. Those who signed their 12 month leasing agreement not too long ago are now facing an urge to leave their legally binding agreement before it’s over. Most common reasons for that are home purchase, job relocation, family matters and even relationship breakups.
What Is a Buy-Out Clause?Many tenants do not get to find out what buy-out clause means, until they need to get out of lease. And that’s when surprises come their way. Buy-out clause is usually interchanged with the meaning of a lease break clause, which gives a tenant a right to terminate the tenancy during any fixed period of their lease. This luxury of terminating a clause doesn’t come without a financial consequence. If landlords do have such a clause, then they will require that a tenant submits a 60 days notice and pays a penalty of 2 months rent. That’s the biggest caveat, although it gives you a way out of your leasing agreement.
Any Other Options to Save Money?99% of the time, landlords let you do the work of finding a tenant to get your unit re-rented. If you find a qualified person based on their income, credit and background checks — then you won’t be required to pay any lease break penalties to your landlord. Subletting your unit is usually a prohibited practice for most landlords, however, even if your landlord allows it, I recommend that you stay away from it. Why? Subletting is a horrible choice for you, as a tenant. You’ll still be be on the lease and financially responsible if the new sub-lessee fails to make payments to your landlord. Therefore, if you can do a lease transfer or lease assignment to someone else — it’d be a much better idea.