End Lease Early - Forfeit Deposit?

[Morgan Porter]

It’s standard and understood that if you end a lease early that you lose your security deposit correct?

[Shera Gregory]

I would say no, it's not. Some landlords put a provision in their lease that explains what happens if the tenant wants to break the lease (a lease-break fee). This is different from the security deposit which has a different function. You still need the security deposit to cover damage.

If there is no lease-break fee in the lease then, in effect, the tenant is on the hook for the full amount of the lease. For example, when renting for $1000 a month my lease says that the tenant agrees to pay $12,000 to be paid in monthly increments of $1000. However, in reality nobody ever pays that full amount (ie leave after 6 months and pay you the full $6000 remaining). Often a lease break fee of 2 months rent is listed. Of course, this has to be in line with state laws, local regulations, etc and I'm not offering legal advice, just sharing my experience as a landlord here in Richmond.

That said, I would offer to use whatever portion of the security deposit is not needed to cover damage toward the amount owed by the tenant not fulfilling their obligation to pay 12 months of rent. That's usually about the best you can hope to get. That's why some landlords use month-to-month leases from the beginning. The 12 month lease winds up putting more of an obligation on you as the landlord since tenants often feel free to leave no matter what they signed.