What happens if you walk away from a lease contract?

Asked by Julia Haubitz, New York, NY Sun Feb 15, 2009

We are renting a flat in New York City. We are German and came here to start a business. But the economy crisis forces us to go back to Europe. Unfortunately we have signed a two years contract (17 month left). We have tried for weeks to find someone to reassign the lease to, but in this market it seems to be impossible, even if we offer it for a smaller rent (by giving money upfront). Our broker doesn't give us much hope either.
My question is, what would happen if we just go back to Europe and stop paying our rent. The Landlord doesn't know our address in Europe. Would the leasing office be fine with the two month lease deposit and drop the case? Can we ever come back to the USA or will there be a record on our social security number? Will they be able to track us down and fine us?
I know it would be against the law, but paying that much money for much longer would ruin us!
Please tell me what our options are and what the worst case scenario would be, if we just "escape".

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joanna lane, Agent, Cutchogue, NY
Wed Feb 18, 2009
BEST ANSWER
That's not "escaping", it's putting a heavy weight on your shoulder and carrying it around with you for the rest of your life because you know you did the wrong thing. I'm so sorry that your business venture hasn't worked out and hope things turn around soon. It's natural when something fails to want to run away, so I don't blame you for the way you feel, even though I know you know better. If you are having financial problems, you are certainly not alone, and it's no shame to go to your Landlord and explain the situation honestly. You can then offer to let them keep the 2 month security if you can leave immediately. They may agree to accept that, then you can leave with a clear conscience having done the right thing. Nobody knows where life is going to take them and in your shoes, I would not want to close the door to coming back to the US. I would also not want to bet that they could not find you in Germany - it's a very small world these days and borders are no boundary. Don't make any decisions until you hear what the Landlord has to say. I wish you lots of luck with your next venture.
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Dp2, , Virginia
Thu Feb 19, 2009
Julia, tut's mir leid das zu hören. Wann werden Sie nach Europa fliegen?

Is the lease in the name of your company, or in your name? If it's in the name of your company, then did anyone personally guarantee the lease?

If the space you're leasing is in a prime location, then you might try checking with the real-estate procurement agents for various corporations to see if any of them have plans to expand into NYC (if not already located there), or if they'd like to move to your location (assuming your locate is better than their current location). You might also consider contacting companies based in Europe that are looking to expand into NYC, and perhaps you might be able to sublease to one of them.
0 votes
joanna lane, Agent, Cutchogue, NY
Wed Feb 18, 2009
I'm so sorry that your business venture hasn't worked out and hope things turn around soon. It's natural when something fails to want to run away, so I don't blame you for the way you feel, even though I know you know better. Unfortunately, we each have to face up to our responsibilities in life and paying your rent for the remainder of the term is one of yours. That's what you agreed to do, so if you are having problems, you owe it to your Landlord to explain the situation honestly. You can offer to let them keep the 2 month security if you can leave immediately, and they may agree to accept that. If not, then you may have to stay and find different work until a new tenant can be found who will take over the lease. Don't make any decisions until you hear what the Landlord has to say. You never know where life is going to take you and in your shoes, I would not want to close the door to coming back to the US. I would also not want to bet that they could not find you in Germany - it's a very small world these days and borders are no boundary.
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