With the exception of truly egregious failure, I haven't seen folks try to enforce liquidated damage clauses for various reasons.

@Gregory CudziloThe entire metro area, with exception to the far outlying areas, have been hot for a decade and will continue to do so.

In my state sellers are required to disclosure material defects except in special cases such as estates where there is nobody with first hand knowledge.

Joe, who knows virtually nothing about medicine except his own experience (which is real and lived, I'm not diminishing his experience), responds with: "Oh, man, that knee pain is probably from brain cancer, you should get that checked out, I'm telling you man, it happened to me."

Everyone on here is right :) really even me :) (except for the comment that said... you are too inexperienced to do it... you may be right now, but you sound intelligent enough to learn. 

She want's to void the lease due to extenuating circumstances.  

Leases MUST be renewed in NJ with a few exceptions, so you could not just decline to renew.  

I hold no contempt toward the owner because I wish I had circumstances like his (owning a building that someone pays you rent AND property taxes on).

It's a valid strategy if the rental real estate losses are non-passive to you.If the 401(k) distribution is an early distribution with no known exception, you're going to get hit with the 10% penalty tax regardless.

In the right circumstances, that can be a very good strategy.