Leasing Contracts

• When you know you need to break your lease, dig out your lease agreement to check the terms for early termination. This agreement details the financial penalties for lease termination and the process you are required to follow. It is important to follow the process to the letter, even if you decide to try to negotiate different financial terms.
  
  Some contracts may say that early termination is not allowed. In that case, contact the leasing company to start discussing your situation.
  
  

Housing Leases

• With the exception of month to month leases, most house or apartment leases do not allow early termination. If you do need to break your lease, approach your landlord to work out a solution. Your contract may state that you are financially responsible for entire balance of the lease, but your landlord may let you off the hook if you can find a replacement renter or share in the expense of advertising the property. Your landlord must approve any new renter.
  
  If you are terminating your lease because of a problem with the property, like major repairs your landlord refuses to make, you may have more room for flexibility. Most states have laws that require landlords to make certain repairs within a set period of time, or the lease is null and void. Your state bar association can help you figure out the laws in your area. If there is a tenants' rights organization in your town, they can also help.
  
  

Car Leases

• Car leases are notoriously hard to terminate. Most car lease contracts do not provide any early termination options. You can return your car to the dealer early, but you would still be on the hook for the remaining payments plus any wear and tear or excessive mileage fees. There may also be a lease termination fee.
  
  According to J.D. Power and Associates, cheaper options for getting out of a car lease are transferring the lease via a lease transfer service such as LeaseTrader.com. With these services, someone else takes over your lease payments for the rest of the leasing period. Note that the leasing company has to approve the termination and may still hold you responsible if the new lessee doesn't make payments.
  
  Another option is selling the car and using the proceeds to pay off the remainder of the lease. This choice saves the early termination, wear and tear and excessive mileage fees a dealer would charge.
  
  

Legal Issues

• If you terminate a lease without an agreement from the leasing company and simply stop making payments, you could face legal implications. The leasing company can sue you for breaking the contract and they could report you to the credit bureaus, damaging your credit. Early termination may not always be cheap, but negotiating terms will save you from a legal fight.
  
  Be sure to get any agreement you make with the leasing company in writing.