Lease dictionary
Liquidated damages
A pre-set dollar amount for breaking a lease rule, agreed in advance.
A liquidated damages clause fixes the cost of a breach up front: 'break the lease early, pay two months' rent.' Courts enforce them when the number is a reasonable forecast of real losses - and strike them as penalties when it's inflated.
In leases they appear as early-termination buyouts, lost-key charges, or re-letting fees.
Watch out
A fair buyout clause is useful. A liquidated damages figure wildly out of scale with the landlord's real loss (e.g. six months' rent) is challengeable.