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Possible to break lease based on reasonable expectation that contract will be breached by other party?

San Francisco, CA |

I moved into a condo the day a receiver was appointed by the court under foreclosure proceedings by the lender. Since that date, occupants in the building have moved out and notified other tenants that they did not receive their security deposits back within the prescribed 21 days - they were told the landlord didn't have the money to return.
The landlord technically is an LLC and the principal of that LLC is filing for bankruptcy. Given that I will almost certainly not receive my security deposit and also that I believe the landlord willfully entered into the lease knowing it would not return that security deposit (since it was promptly spent instead of being set aside), can I move out before the end of the term based on breach of contract or fraud?

Attorney Answers 2


  1. Best answer

    Based on the facts as you've described them, there does not appear to be grounds for you to break the lease. However, if you don't think you'll receive your security deposit back, you could withhold rent during your last month. While you may be hit with an eviction lawsuit or three day notice, once you move out, the only thing at issue will be the damages for the last month's rent and your security deposit, which should cancel each other out.

    Disclaimer: You should discuss your situation with a local attorney, as the above statement is a general overview and does not take into account all of the factual considerations in your case. Nothing in this statement creates an attorney-client relationship.


  2. It appears that the doctrine you would like to use is what is called "breach by anticipatory repudiation". However, that doctrine would apply only if the landlord expressly stated that it would not perform one of its obligations.

    That appears not to have happened here, so I am afraid that you cannot break the lease merely because you have a reasonable expectation that your deposit will not be returned.

    Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

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