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Lease Takeovers, Early Termination, and The Economics of Getting Out of an Unwanted Lease In New York

An unwanted lease need not turn into a lawsuit.

· Residential Lease,Attorney,Lease Takeover,Economics,Veeto Tips

Go-to experts are not just a nice-to-have. They're a must-have once you become an adult.

When your toilet starts leaking, you think of your friend who knows plumbing, and you call him for pointers. When you get in a car accident, you think of your mom's friend who runs an insurance agency, and you call her for pointers. Similarly, when you find yourself in a lease (or any other contract, for that matter) that you no longer want/need, you think of your former roommate who became an attorney; you might even call her for pointers on getting out of your unwanted lease.

But with legal matters--as opposed to trades (i.e. plumbing) and non-legal service industries (i.e. insurance and banking)--there is so much variety in the kinds of legal issues a person might encounter, that lawyers have long practiced within discreet specializations as a way to attain/maintain proficiency despite the enormity and complexity of the legal field. Examples of specializations (sometimes also referred to as "practice areas")...

  • Contract Lawyer
  • Intellectual Property Lawyer
  • Criminal Lawyer
  • Social Security Disability Lawyer
  • Medical Malpractice Lawyer
  • Estate Planning Lawyer
  • Employment Lawyer
  • Personal Injury Lawyer
  • Bankruptcy Lawyer
  • Immigration Lawyer
  • Tax Lawyer
  • Family Lawyer

Other practices areas that are designed to be a bit more comprehensive, but are their own kind of specializations nonetheless, include...

  • Civil Litigation Lawyer
  • Corporate Lawyer
  • General Practice Lawyer
To illustrate my point, I have listed just 15 examples of specialization above. But there are more, and the point is that when you have a legal issue, you need to find someone who has specific expertise in the fact-set of your case. What kind of case is it? What happened? Because many legal cases will eventually result in you losing or winning, you need to give yourself the best possible chance to win, within your budget of course.

But in comparison to questions about plumbing or insurance, you can see that finding someone within your own network who might have the specific legal expertise you need in a given case is much more difficult. Because while your former roommate went to law school and became a lawyer, he/she probably only has expertise in one of the fifteen practice areas listed above. So you would need a minimum of fifteen former roommates who became lawyers to get the same kind of go-to expert "coverage" that you might have in the areas plumbing and insurance with only two people.

Many of us don't have that "legal expert friend" in our little black books—at least not one with the specific kind of expertise we need, at the very moment we need it. (In fact, that's probably why you are here now, reading this article. No worries...we wrote this article for you!)

If you need to get out of your lease in New York, Veeto can help.

We like to keep it simple, too. You can book a micro-consultation now. Then we will call your phone directly at the scheduled time.

An unwanted lease need not turn into a lawsuit.

You might not be thinking about it this way right now. But that lease you no longer want...that's actually something that some people might want, a sort of asset, as it were; and you have partial control of that asset.

Yes, to an extent that might not have realized so far, you are actually in control.

Why that matters? Conceptually, the key to getting out of your lease early--without exorbitant penalties or expensive lawsuits--might simply be to find a person who wants what you have. (Many people refer to this as a "lease takeover.") Of course, you'll need more tactical detail than that. So this article was written to supply you with those details so that you can successfully get out your New York lease before the end of its term.

Here is a summary of what you need to know:

Send your landlord a letter.

Many people say that you should only send important letters to your landlord via certified mail, with return-receipt requested, but we have a different opinion. Snail mail is old-school.

new york lease takeover

We prefer email, especially if the contract specifies email as an agreed upon medium for official communication, or if the landlord has thus far sent you any official communication via email (invoices, bills, reminders, anything).

What should the letter say? The letter should clearly articulate the sublet you are proposing. Begin by stating the basis of your legal relationship with the landlord (when your lease began, when it ends, and what you are leasing form the landlord). Then succinctly state why you want/need to do a sublet, when you would like the sublet to begin, and when you would like it to end. Next, provide the landlord with all of the due diligence you have already done on the proposed subtenant:

  1. Name of proposed subtenant
  2. Mailing address of proposed subtenant
  3. Financial information of proposed subtenant
  4. Background (check results) of proposed subtenant
Finally, include a copy of the proposed agreement you wish to execute with the subtenant (including written consent from any of your current co-tenants), your new mailing address, and a copy of the proposed agreement you wish to execute with your landlord to approve the subtenant.

"Draft my letter for me."

To make sure you get this right, we can draft this letter for you. We will spend a 10-minute call getting the details we need about your case.Then we can take it from there.

Just click the button below to book a call to get started.

Once you send that letter, your landlord has 30 days to either approve or reject your proposal.

A big lever you have in your favor is that your landlord may only deny your proposal for a handful of permitted reasons. So wait for approval from your landlord, but expect a response within thirty days. And here is the cool part: if the landlord fails to respond within 30 days, then you are arguably free to execute your proposed sublet, because the landlord's silence can be treated as "assumed consent."

What if your landlord responds to reject your proposal? If your landlord rejects your proposal, keep in mind that he technically can only reject the proposed subtenant, not your request to sublet in general. Some reasonable grounds your landlord might invoke to reject your proposed subtenant include...

  • Financial information you supplied about your subtenant--and/or financial information the landlord obtained after your request arrived--suggests that your subtenant lacks sufficient ability to pay rent or generally remain responsible for his/her obligations under the sublease.
     
  • The subtenant might have a specific "intended use" of the property that either does not square with the landlord's wishes or is simply illegal (this might sometimes be referred to in the agreement as the "nature of occupancy").
     
  • Your current co-tenants might not be on board with your proposal.
Keep in mind that, even if your landlord approves the subtenancy, whether explicitly or implicitly, you are likely still responsible for some or all of your obligations under the primary lease (we have written about this point before). So the true upside of subletting is that you might be able to find someone who wants what you no longer want, and is therefore willing to pay for it in your stead. But the downside remains: if your subtenant deafults on some or all of his/her obligations, you might still be on the hook.

What to keep in mind, even if your subtenant is approved?

​Because you, as the primary tenant, usually remain legally responsible even after you execute a sublet agreement, it is important that you get this right. That means that you need to attend to all of the normal responsibilities of a tenant, even if you are no longer living there: make sure rent is paid on time and that all other tenant oblations under the lease are met.

P eople often come to Veeto when they need to get out of a lease early, and most of the time, they have done some prior (internet) research before they hop on the micro-consultation with us. For this reason, one of the questions we are often asked is about is lease assignments versus sublets. A quick internet search suggests that an assignment is better than a sublet, and from a primary tenant's perspective--which is your perspective right now--that is probably true. Why? Because an assignment excuses you from much more obligation than a sublet. So it is safer for you if you can get a landlord to agree to this.

There are two problems, though. First, many landlords will not agree to an assignment. When that happens, though, they have to either provide you with "reasonable grounds" for rejecting your proposed assignment or release you from your obligations under the lease within 30 days (which is the price landlords must pay if they wish to refuse to allow an assignment without providing any reasonable explanation). If the landlord unreasonably refuses to approve your assignment proposal, without offering you a reasonable basis for the refusal, and he/she refuses to release you from the lease 30 days later, then could either take them to court or hire Veeto (we've handled thousands of these cases). If you can show that your landlord "acted in bad faith" by refusing to approve the assignment and offering no reasonable explanation, then you could seek to recover court costs, attorney’s fees, your deposit, and any rent that you overpaid.

Second, of those landlords who will agree, they often charge you an exorbitant "assignment fee." Neither of those downsides are great, but the exorbitant fee for executing a valid lease assignment is probably better than leaving yourself exposed to the consequence of the potentially bad behavior of your new subtenant. However, there is a third, even better option that most people do not realize before they talk to Veeto: terminating the lease early, which skips both the exorbitant fees and the precarious legal protection afforded to you by a subtenant promising to follow the rules, but with no guarantee that this person will keep that promise.

Hands down—terminating the lease early is the far safer/cheaper option, if you can pull it off.

The reason comes down to economics. With a sublet, you remain exposed to further economic harm and cover only your surface-level, monthly obligations such as rent. With an assignment, you are excused from much of the exposure to further economic harm that sublets carry, but you are still exposed to some. The only instance in which a sublet or assignment might be economically superior to terminating early--provided that you have grounds for terminating early--would be if you could command a higher rent payment yourself than you owe to the landlord. The contract--or some other local regulation--might not allow this. But in a highly competitive real estate market like New York City, for example, this is a real possibility if you were able to negotiate a good deal on rent in the beginning.

In contrast, terminating your lease early gives you the most leverage. Even if you were able to demonstrate that you could terminate early, your landlord might be far more amenable to executing a deal that is notably good for you. Why? Litigation and legal wrangling can be expensive when you do not have a service like Veeto in your back pocket. So your landlord is at a structural disadvantage because Veeto only works with tenants. Landlords and everyone else are stuck paying $2,000 retainers and $300/hour legal fees to regular ol' attorneys, which gives you an economic advantage in any sort of contract dispute.

Talk to (a human being at) Veeto.

If you're new to Veeto, welcome. We think that the future of (what we call) the "low-value claim" segment of the legal market is more likely to be defined by DIY tools and legal-assistant platforms than billable hours and practice areas.

We know that much of the stress surrounding issues like unwanted leases, for example, arise from the disproportion between the "value of your case" and the cost of hiring an attorney to help. One study found that as many as 80% Americans don't use attorneys, despite encountering between 1 and 4 legal issues per year. People avoid legal help not because they don't need it, but because they can't justify the expense of an attorney when the total stakes of getting out of your lease are not large enough.

We get it. That's why we built Veeto to fill that void. Happy to chat about your case.

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