How Does Breaking a Lease Affect Your Rental History?
Understand how breaking a lease impacts your rental history and future housing. Learn what factors influence its severity and how to manage your record.
Breaking a rental lease can significantly impact an individual’s housing opportunities and financial standing. A lease agreement is a legally binding contract outlining the terms and duration of a tenancy. Ending this agreement prematurely without proper adherence to its stipulations can lead to various consequences that affect one’s rental history, making future housing searches more challenging. This article explores the specific mechanisms through which a broken lease is documented and the factors that influence its impact.
Defining Lease Termination
A lease agreement is a legal contract where a tenant agrees to occupy a property for a specified period in exchange for regular rent payments. Breaking a lease occurs when a tenant vacates the property before the lease term concludes without the landlord’s explicit consent or a legally justified reason. Common breaches include moving out early without notice, consistent non-payment of rent, allowing unauthorized occupants, or violating other significant lease clauses.
A broken lease differs from an early termination mutually agreed upon with the landlord or permitted by specific legal protections. Some leases include early termination clauses allowing early exit under conditions like a penalty fee or notice period. Federal laws, such as the Servicemembers Civil Relief Act (SCRA), also provide military personnel the right to terminate a lease early without penalty due to deployment or permanent change of station. These types of terminations, following a pre-defined process or legal right, are not considered a “broken lease” in the negative sense.
Recording Rental History Information
Rental history, including broken leases, is primarily documented and shared through tenant screening companies. Landlords report tenant data, both positive and negative, to these agencies. These reports are considered “consumer reports” under the Fair Credit Reporting Act (FCRA).
Landlord references also play a significant role. Prospective landlords often inquire about payment habits, property maintenance, and adherence to lease terms, including early termination. A negative reference due to a broken lease can hinder future housing applications. Unpaid rent or damages from a broken lease can lead to debt being sent to collection agencies, appearing on credit reports and impacting scores for up to seven years. Eviction filings, even if dismissed, become public records accessible by tenant screening companies, creating a significant barrier to securing future housing.
Elements Affecting Rental History Impact
The severity of a broken lease’s impact on rental history is influenced by several factors. The underlying reason for early termination can be a mitigating factor; for example, a job relocation, medical emergency, or military deployment may be perceived differently than moving out without justification. Providing context can help explain the situation to future landlords.
Effective and documented communication with the landlord before and during the lease termination process is important. Open dialogue and adherence to agreed-upon terms can demonstrate responsibility, even when ending a lease early. Financial resolution efforts, such as paying a lease break fee, finding a suitable replacement tenant, or continuing to pay rent until a new tenant is secured, can significantly lessen negative financial and historical repercussions.
Landlord reporting practices vary; some are more diligent in reporting lease breaches or pursuing collection actions. An actual eviction filing carries a much more severe and lasting impact on a rental record compared to an early termination resolved amicably with a fee. Eviction records can remain on tenant screening reports for approximately seven years. While the impact of a broken lease may diminish over time, it can still remain visible for several years.
Reviewing and Amending Your Rental History
Individuals have the right to access and review their tenant screening reports for accuracy. These reports, considered consumer reports under the FCRA, can be obtained from major tenant screening agencies like Experian RentBureau, CoreLogic SafeRent, and TransUnion SmartMove. Consumers are entitled to one free copy of their report annually from each agency. If a rental application is denied based on a report, the landlord must provide an adverse action notice, informing the applicant of their right to a free copy and the reporting company’s details.
Upon receiving a report, review it for discrepancies, errors, or outdated information. If inaccuracies are found, individuals have the right to dispute the information directly with the tenant screening company. The dispute process involves submitting a formal letter with supporting evidence, and the company has 30 to 45 days to investigate and correct any verified errors.
Communicating professionally with former landlords can be beneficial, especially if reported information is accurate but lacks context. Providing an explanation for an early termination, such as a job relocation, can help clarify the situation for future landlords during reference checks. While this does not alter the fact of early termination, it can offer a more complete picture of the circumstances.