Prospective Home Buyer: “I Can’t Do Anything Till My Lease is Up”

Locked Into a Lease?  Maybe Not

[Editor’s Note: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.]

Realtors hosting Sunday open houses hear it all the time:  prospective home Buyers who see something they like, but “can’t do something” for at least several months, when their current rental lease expires.

Of course, if the prospective Buyer really likes the house, they may want to consider taking the financial hit, and break their lease anyways.

Alternatively, if the Buyer is contemplating a major remodel, three — or six(!) — months of lead time might actually be a plus.

Potential Escape Hatches

Assuming neither one of those scenarios apply, however, then what?

While it’s certainly possible that a renter vacating early may be on the (financial) hook until their lease expires, landlords have a duty to mitigate damages.

Translation:  they have to make an effort to re-rent the unit.

In a (very) tight Twin Cities rental market with low-single digit vacancy rates, that may not be so hard to do.

Scenario #2:  if the renter is a long-term tenant paying a below-market rate, the landlord may actually be happy to terminate the lease.

If that’s the case, it should be possible to negotiate a nominal settlement with the landlord in return for ending the lease early.

P.S.: Once upon a time, there was an urban myth — at least in Minnesota — that state law allowed renters to terminate their leases early in order to purchase a home.

Unh-unh (at least so far as I’m aware).