Legal Question in Real Estate Law in California

Re: Lease break fee

There was a California Supreme Court case decided exactly one year ago today in which the legality of a one-month's rent liquidated-damages clause was a side issue in a case dealing primarily with a corporate landlord's general policy of making deposit refunds difficult or impossible to obtain. I have not read the entire case, and your issue was not directly addressed, but my impression is that the Supreme Court pretty much agreed without discussion that this kind of liquidated damages provision violated Civil Code section 1671(c) and (d) which make liquidated damages provisions void in a residential lease unless the actual damages would be very difficult to determine. See also Civil Code section 1951.5.

You can read the codes at your county law library or most public lbraries.

I should also point out that you can avoid the fee by not breaching the lease in the first place. If you must move, perhaps you can avoid a breach by subletting or assigning your lease, either under the terms of the lease or with permission (waiver of any prohibition).

You should also consider whether you are better off paying the liquidated damages or actual damages. If the landlord has difficulty re-letting the premises, you might end up paying more than one month's rent. Also consider the cost and hassle of litigation.