Many unforeseen circumstances may occur after signing a lease contract. In some cases, tenants may have to break the lease and have someone take over as permitted by the landlord. With that, the outgoing tenant will be the one to look for someone to continue to remaining lease period. So in this guide, we will discuss how to find someone to take over your lease and what to know if you’re the one taking over the contract.
Below, we write about this topic together with advice and important reminders to avoid problems. This applies both to the outgoing tenant and the one who’s going to take over the lease.
What does a lease takeover mean?
A lease takeover is done when the original tenant transfers the rental responsibility to another person. This applies to real estate, vehicles, and other property leases.
Basically, the original tenant wants to break the lease without being legally liable. In this case, the tenant and the landlord may agree to have someone continue the rest of the lease’s duration.
Moreover, breaking a lease can happen with or without penalty. Breaking the lease due to military assignment doesn’t have a penalty. The same goes if the reason is the landlord’s failure to maintain the livable condition of the property.
However, if the tenant and the landlord want to avoid legal issues, the two parties may agree to a lease takeover. And since the lease is tied to a fixed rental rate, many people find it appealing to take over, especially if it’s lower than the current market.
Take note that a lease takeover is different from subletting. With subletting, the original tenant remains in the property and just rents the place or part of it to another person. On paper, the original tenant is the one responsible for paying the rent and upholding all the other stipulations of the contract. If the sublet tenant fails to pay, the original tenant will remain accountable.
How to find someone to take over your lease?
Finding someone else to take over your lease has its challenges. But before you start looking for a new renter, make sure that it’s allowed under your contract. If not, the lease takeover will be illegal and you may get sued by your landlord.
But if there’s a clause allowing it or your landlord gave formal permission, here’s what you can do:
1. Consult your landlord
Upon receiving permission from your landlord, you can also raise the concern of finding someone else to take over the contract. Some landlords would want to be involved in the vetting process to ensure that the new tenant has good credit standing and clean background.
Aside from that, your landlord may know someone who’s actually looking for a place to lease. It’s because most landlords are connected to real estate agents and can easily put their properties in the rental market.
Take note that some landlords would actually be happy if you break the lease, especially if the property market has experienced an uptick in rental prices. Breaking the lease allows landlords to increase their rental prices before a new tenant signs up.
Overall, it’s important to communicate with your landlord no matter what your lease contract says. This is to avoid conflict and misunderstanding.
2. Post an ad
Once the lease takeover is fully permitted by your landlord, the next step is to post an ad to find prospective takers. You can post on social media about the details of the property and the basic details of the lease.
Feel free to ask friends and family members who may know someone who’s looking for a place to rent in the long term.
There are also websites like Swapalease.com that helps you find car buyers to take over your vehicle lease. The platform will also help you transfer your lease legally by providing details.
For rental properties, you can try posting an ad on the Leasebreak website. This platform hosts ads for lease breaks, sublets, rentals, and more. They will help you find someone who can take over your lease anywhere in New York City.
Wherever you decide to look for a person to take over the lease, always be careful with scammers. These people lurk online and will prey on desperate lessees who want to get out of their rental contracts as fast as possible.
3. Host an open house
You can also host an open house to tour interested tenants to the apartment unit. Just make sure that you have the permission of your landlord before doing this.
It’s important to consult your landlord about hosting an open house, so you can come up with a reasonable setup. In some cases, the outgoing tenant will host the open house and the landlord will be the one to perform the background checking.
Overall, hosting an open house for a lease takeover can help save landlords a lot of money from paying real estate agents.
If you decide to push through with the idea, a group showing during an open house is more efficient. This allows you to tour a group of interested individuals instead of booking them for a tour one by one.
Moreover, it will be more efficient if you only schedule a time window for the showing. This way, you won’t be spreading yourself too thin in case individual bookings don’t show up.
4. Offer incentives
Sweetening the deal can help you find someone to take over your lease faster. For example, you can include in your ad that you’re willing to cover the security deposit for anyone who will sign up to take over.
You can also offer to pay the first month of rent or the credit checks that the landlord requires. These offerings make your lease takeover a more interesting option. Remember that you’re not the only one in the market who’s trying to break a lease. It will help if you can offer something that others can’t.
Aside from that, you should be open to negotiating the lease takeover terms. As long as it’s reasonable, it won’t hurt to meet the new tenant halfway. After all, that person is also doing you a big service by setting you free from the lease.
Negotiating includes covering paperwork fees as well as costs your landlord will impose for the takeover to push through.
5. Hire a real estate agent
If you don’t have the time to host an open house or look for someone to take over your lease, the best move is to hire a real estate agent.
If you’re breaking the lease to buy a house, you can put your realtor in the loop. Your real estate agent may help you find someone who can sign up for the lease.
The good thing is that realtors have connections and relationships with landlords and potential tenants. They could link you to interested individuals, which will take much of the work off your shoulders.
But before you hire an agent, make sure that you inform your landlord. This is to avoid the possibility of your landlord also hiring someone else.
How to handle a lease takeover
Once you found a tenant who can take over your apartment lease, you need to furnish an Assignment of Lease document. Your landlord can provide this or you can also make your own. Don’t worry because there are many templates online and you can also consult a realtor for guidance.
Take note that the formal lease transfer document will formally relieve you of any lease obligations. It also indicates that the new tenant will now be responsible to lease the property. To make it effective, your landlord and the new tenant must sign it complete with their full names and the date of signing.
After that, your landlord will prepare a new lease document for the new tenant to sign. Your name is no longer included here since you’re already free from the lease obligations.
Although it’s not really required to have lease agreements notarized, you should consider it for the lease transfer. This will make the document legally binding, especially if the lease is longer than one year.
As the one exiting the lease, you should be prudent enough to cover the expenses for the notarization. Also, you should expect to cover the costs for paperwork or another month’s rent for the takeover. Lastly, make sure that you, the landlord, and the tenant has individual copies of the notarized agreement.
Important reminders when taking over a lease
If you’re the one taking over a lease, it’s important to be knowledgeable of the process. This will save you from the hassle in case the takeover or lease break is illegal.
Below are some of the points to remember before you take on someone else’s apartment lease:
1. Prepare for the credit check
First, you have to prepare for a credit check that the landlord will conduct. Just because you’re taking over a lease doesn’t mean you’re not subjected to standard rental procedures.
Credit checks dictate whether you can pay for the lease or not. So if you don’t qualify for a standard lease under normal circumstances, it’s unlikely for you to qualify for a takeover. Overall, a lease takeover is similar to a new lease, except for the circumstances surrounding it.
Aside from credit checks, expect a background check as well. Your landlord will dig deep into your rental history, especially to check if you have an eviction history or an inability to pay rent on time. Aside from that, the landlord will also check criminal records to ensure that you are in good standing with the law.
2. Compare lease takeovers
Before you sign a lease takeover, it’s important to compare your options. You should shop around and compare lease conditions to ensure that you’re going to get the best deal.
You can also consult a real estate agent about the best options in the rental market. Just remember that very low rental rates aren’t always a good thing.
3. Inquire about the lease terms
Before inking the deal, you must be fully aware of the terms and conditions included in the lease takeover. In some cases, the landlord may require the new tenant to cover painting and cleaning fees before that person can move in.
You can also ask the departing tenant if he or she can cover this. Most of the time, the previous tenants will be willing to shoulder the cost just to get you to take over their lease.
4. Don’t hesitate to negotiate
Usually, the new tenant will inherit the same rental rates as the previous lease contract. However, landlords may also decide to increase the rates to match the current market.
Despite that, you can still attempt to negotiate the terms. Some landlords are willing to adjust because they don’t want their units unoccupied for too long.
You can also negotiate breakpoints on your lease. This is a time window after a specific period wherein you can break the lease without penalties. It’s an added protection in case you’re planning to buy a house or move in the future.
Aside from the landlord, you can also negotiate with the departing tenant. This involves covering costs required by the landlord before the new tenant can secure the lease.
5. Take the landlord’s words, not the previous tenant
Even if the departing tenant seemed to have given you all the information, you should still consult with the landlord. Always remember that the landlord will have the last say when it comes to leasing terms. If the departing tenant promised something, confirm it with the landlord to ensure that it’s true.
6. Request a copy of the Assignment of Lease
Lastly, always request a copy of the Assignment of Lease before you sign up for the takeover. Aside from that, you should ask for landlord consent evidence to ensure that the lease takeover is legal and valid.
If the departing tenant can produce any, it’s a sign that the takeover is being undertaken behind the landlord’s back. Signing up for it will just put you in a vulnerable position where you can lose money and have issues with the accommodation.
Take note that you should only sign a lease takeover once you’ve met with the landlord or their authorized representative. While it takes more time and effort, it will save you from the hassle later on.
Frequently Asked Questions
Q: How can you get out of a lease?
A: There are several ways you can get out of a lease without penalties. This includes a break clause in the lease, subletting, having someone take over the lease, or negotiating the terms with your landlord. It’s important to involve your landlord in the process to avoid legal entanglements. Also, make sure that your contract has a break clause as a protection in case unforeseen circumstances occur.
Q: Does breaking a lease affect your credit score?
A: Breaking a lease can take its toll on your credit score if there are unpaid debts. This is also true if you broke the lease beyond legal parameters. But overall, if you pay all fees, settle bills with the landlord, and exited the property legally, breaking a lease won’t affect your credit standing.
Q: What happens if you break a lease early?
A: If you broke a lease early, you’ll have to pay for the rent until the indicated end of the tenancy in the contract. Other contracts also include a break clause point, which is like “stop-overs” to the contract when a tenant can decide to terminate or not without penalties. However, if your landlord permits, you can have someone else take over the lease, so you can get out without having to pay the remaining rent duration.
Q: What credit score is needed to take over a lease?
A: If you’re planning to take over a lease, make sure that you have a credit score of at least 700. A higher score is better and will likely secure the contract for you. Also, it depends on whether the landlord is willing to lease with a lower credit score. Overall, you should check the requirements to avoid disappointment.
Q: What if my landlord doesn’t agree with a lease takeover?
A: If your landlord doesn’t agree to have your lease taken over by someone else, you have no choice but to pay for the remaining duration of the contract. Otherwise, you’ll be legally liable because you broke the contract unilaterally. If you run from your obligations, the landlord may sue you, which may end up in higher fees and problems.
We hope that this post helped you learn how to find someone to take over your lease. You can also consult a real estate agent to have customized advice that matches your specific situation. Above all, you should involve your landlord in the process and ensure that he or she allows the takeover.