What Residential Landlords and Tenants Should Know About Breaking a Lease during the Covid-19 Pandemic

By Josean Otero, Esq.

Many tenants are facing immense emotional and financial pressure as a result of the COVID-19 pandemic and are considering breaking their lease. Although there is a moratorium in effect which prevents landlords from legally evicting nearly all residential tenants, there are currently no laws or executive orders concerning the early termination of a lease agreement because of a viral pandemic.  

Tenants should understand that they cannot simply break their lease due to COVID-19. In general, it is often difficult and expensive for tenants to break a lease since they are binding legal contracts. By entering into the agreement, tenants are normally responsible for paying the rent until the lease ends. Therefore, if a tenant moves out and breaks a lease, they are still responsible for the remaining rent due according to the lease. A landlord would then have the right to sue the tenant for the losses incurred through the lease period, or until the apartment is rented again, whichever occurs first.

          It is a risky proposition for tenants to stop making rent payments and abruptly move out without first obtaining permission from the landlord. Not only does this leave the tenant legally liable for the remainder of the lease, but it also leaves a bad impression on the landlord. Leaving on such bad terms could further result in problems with finding a new place to live as many landlords contact prior landlords for references.

Therefore, it is important for tenants to openly communicate with their landlords first if they want to break a lease early. Even though the landlord has no obligation to do so, they may be more flexible in allowing tenants to end their leases early as a result of COVID-19.

Why Landlords may allow tenants to break a lease early due to COVID-19

Although tenants are typically legally and contractually responsible for all the rent until the end of the lease, landlords might be more accommodating now if they are approached by a tenant who cannot afford to pay rent.

Under normal circumstances, a landlord could evict a tenant who did not pay their rent, however, in response to COVID-19, the federal government has passed the CARES (Coronavirus Aid, Relief, and Economic Security) Act, which prohibits landlords of properties that are secured by federally backed mortgages from evicting tenants from March 27 to July 25, 2020. This act applies to Section 8 landlords, as well as those who participate in the Low-Income Housing Tax Credit Program. Additionally, the CARES Act places a moratorium on the imposition of additional fees and penalties related to nonpayment of rent.

Governor Phil Murphy has temporarily suspended evictions for all tenants of residential properties in New Jersey. Under this executive order, landlords can still file for evictions but, they are unable to conduct lockouts until 60 days after the state of emergency order has been lifted. In regards to rent, the “order does not affect any schedule of rent that is due,” signifying that at this time, the pandemic does not relieve tenants from their rent obligations.

For the time being, tenants who are not paying rent can continue to reside in their apartment. Since landlords are currently unable to evict their tenants, it might be prudent that they be more flexible with rent payment dates and allowing tenants to break their lease agreements. Otherwise, landlords can be left with tenants occupying the unit while paying no rent for an unknown period of time.

How Parties should approach breaking a lease:

          For tenants who are seeking to break their lease due to having been adversely impacted by the pandemic, they should be straightforward and honest about their current situation with their landlord. Whether the desire to break the lease stems from recent job loss or simply wanting to move out, landlords are likely to appreciate the candor and will be more willing to come to an agreement. Some landlords are willing to break their lease with a tenant in exchange of the tenant forfeiting their security deposit. An alternative for tenants is to try to find a replacement renter. Ultimately, when landlords understand the situation, they are more likely to be able to work out a solution that is mutually beneficial. 

          If a tenant and a landlord reach an agreement on early lease termination, it is important to have the agreement put in writing. Without a written agreement, it is difficult to prove the agreed upon terms, should legal problems arise. Consultation with a qualified attorney before making an agreement is strongly recommended.

 Josean R. Otero, Esq.  is an associate attorney with the firm of Ehrlich Petriello Gudin & Plaza located in Newark who concentrates in the area of civil litigation with an emphasis on Landlord/Tenant and commercial litigation matters. He is admitted to practice in New Jersey and the U.S. District Court for the District of New Jersey. He regularly appears before courts throughout New Jersey on behalf of corporate and individual clients. He can be reached at (973) 313-8921 or here.   

The information you obtain herein is not to be construed as legal advice. You should consult with a qualified attorney for your particular matter or situation. You should not attempt to implement any legal document that might have an adverse effect on you without having first consulted with counsel.

 

Read More Information About COVID-19

Read more News & Views.

How the Real Estate Industry Can Take a Page From Healthcare

How the Real Estate Industry Can Take a Page From Healthcare isBy William Kinney, CPA There was a time in March 2020, possibly even before the announcement of the global pandemic, when real estate leaders across the globe asked themselves, how are we going to keep our...

NJ Clean Energy Incentives Program

NJ Clean Energy Incentives Program On October 22nd the outreach team for the NJ Clean Energy Program delivered an extremely informative webinar on their available programs. For those who may have missed the program or would like additional information, please find the...

CDC Issues Guidance Apartment Industry Concerns Heard

CDC Issue Guidance Apartment Industry Concerns Heard By Griffin Alexander The U.S. Centers for Disease Control and Prevention (CDC) has created a “Frequently Asked Questions” (FAQ) document as informal guidance to supplement its Order to temporarily halt residential...

Open Today Expanded Relief Under Small Landlord Emergency Grant Program (SLEG)

Open Today Expanded Relief Under Small Landlord Emergency Grant Program (SLEG)Update: This program closes on October 13 at 4pm here is a great video that is sure to answer many of your questions: https://youtu.be/y1leBs3e3kQ  The New Jersey Housing Mortgage and...

Let’s Get Real -When Dealing With Leases

Let's Get Real-When Dealing With LeasesBy Mahlon L. Fast, J.S.C., Ret After 60 years in the profession, and striving towards my “semi-retirement,” I’m going to “let it all out.” And, after 60 years, you might well think that I’ve become “hardened” in my ways. In a...

Small Landlord Emergency Grant Program (SLEG) Announced

Small Landlord Emergency Grant Program (SLEG) AnnouncedDuring a press conference earlier today, Governor Murphy announced the Small Landlord Emergency Grant Program (SLEG) to assist small rental property owners (3-10 unit properties) and their tenants during the...

FRKB& G Presents Supreme Court Issues Order Lifting Indefinite Suspension of Landlord/Tenant Trials in Very Limited Circumstances

FRKB&G Supreme Court Issues Order Lifting Indefinite Suspension of L/T Trials in Very Limited CircumstancesSince Governor Murphy declared a State of Emergency and a Public Health Emergency, Courts hearing landlord/tenant cases came to a halt. Courthouses were...

Is It Wear & Tear Or Damage

Is It Wear & Tear Or Property Damage? Let’s be honest, in a perfect world we would love to have a tenant vacate your property and leave it showroom ready but that is not the normal scenario.  People are living in your investments.   They are using the sink,...

What Residential Landlords and Tenants Should Know About Breaking a Lease during the Covid-19 Pandemic

What Residential Landlords and Tenants Should Know About Breaking a Lease during the Covid-19 PandemicBy Josean Otero, Esq. Many tenants are facing immense emotional and financial pressure as a result of the COVID-19 pandemic and are considering breaking their lease....

COVID-19 Short-Term Rental Assistance Program (CVERAP)

COVID-19 Short-Term Rental Assistance Program (CVERAP)As a part of the Murphy Administration’s response to assist New Jersey residents affected by the COVID-19 pandemic, Governor Murphy and Lieutenant Governor Oliver announced the COVID-19 Short-Term Rental Assistance...

Scroll other News & Views Posts.