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12 Things You Need to Understand About Leases

Person signing lease agreement with landlord
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Signing a lease without understanding it could leave you stuck in an apartment you don’t want or in court fighting with a landlord.

While you probably know that leases are legally binding contracts, sometimes they are far more binding than tenants realize. For example, a tenant may find themselves frustrated when they find out it’s difficult or costly to get out of a lease.

Here are some of the things to look for in a lease before you sign it.

1. Landlord Contact Info

Who is your point of contact for the property? Landlords often hire a property management company to handle things like repairs and rent collection. Other times, he or she may handle it alone.

The agreement should state who your point of contact should be for any issues that arise.

2. Break Lease Clause

Lease agreements usually have a break lease cause, which is an effort to protect landlords and guarantee stable tenancy. The break lease clause outlines what circumstances must be in place for a lease to be broken, as well as what fees you might be charged.

“You can get out a lease,” says Fausto Rosales, an attorney based out of Miami who handles tenant-landlord cases on a regular basis. “The question is how much is it going to cost you in penalties?”

The break lease agreement may also have a buyout clause. For example, Elizabeth Colegrove of The Reluctant Landlord offers the example of allowing either the tenant or the landlord to break the lease without penalty so long as they’ve provided 60 days’ notice and a two-month break-lease fee.

Some leases are month-to-month, though they come with pros and cons.

This is an extremely important part of the agreement. Sometimes life happens and you may find yourself needing to break your lease earlier than expected.

3. Repairs on Your Rental

Another important aspect of a lease agreement is to get clear on who pays for repairs — you or your landlord?

Some landlords will pay for it themselves, but others require a repair deductible for certain situations.

4. Property Maintenance

As a tenant, you’ll want to know what kind of regular upkeep you may be responsible for. The lease will tell you whether you’re responsible for routine maintenance, like smoke detectors, air filters, or yard work.

5. Are Pets Allowed?

If you’re moving with a pet, then you’ll need to find a place that allows them. Some lease agreements will require a pet deposit on top of your regular deposit and may also collect additional “pet rent.”

There could also be certain rules for pets. For example, maybe the landlord allows cats but not dogs. Or maybe you’re only allowed to have dogs under a certain size.

6. Automatic Lease Renewal

Depending on the city or state, some lease agreements can have an enforceable, automatic renewal clause. This clause basically states that the lease automatically renews when the current lease agreement ends.

If you want to be able to renegotiate a lease, or you plan on leaving when the current lease is up, then you’ll probably want to avoid automatic lease renewal.

7. Additional Fees Associated with the Rent

The lease agreement will outline how much you’ll be paying in rent each month, but there may be other fees that you need to look for.

For example, when is a payment late, and what kinds of fees go into effect as a result of a late payment? Is it a month-to-month lease? If so, what’s the premium for such an agreement?

8. Home Owner’s Association

If you’re moving into a newer building or large apartment building, chances are you may be dealing with a home owner’s association. This could mean more rules and, you guessed it, more fees.

If there is a home owner’s association, what are their rules? What are their fees? Who is the point of contact? Make sure this is all clearly laid out in the agreement so you don’t run into any surprise issues with the HOA.

9. Renter’s Insurance

Some landlords require that tenants have renter’s insurance. The lease agreement will tell you if this is required and what must be covered by your policy.

10. Are Utilities Included?

While utilities are sometimes covered in your rent, sometimes they aren’t. Furthermore, sometimes only certain utilities may be covered (like water) but the tenant is responsible for others (like internet).

11. Alterations to the Rental Property

This part of the agreement will detail whether or not you can make changes to the property. This depends on the landlord or the home owner’s association.

Questions to address: If you are allowed to make alterations, what kinds of changes are you allowed to make? What are the rules? What liability does the tenant have? What happens if damage occurs during the alteration?

12. Key Change

Who is responsible for the keys? Do new locks need to be installed? Who pays for that? These are all important questions which the lease agreement should answer.

What if I need more help?

If you still have questions about your lease after reviewing it or if you want to negotiate terms, you’ll want to consult an attorney before signing anything.

“It’s a lot easier if someone comes to me before they’ve signed a lease than if they want to renegotiate after the document is signed,” says Rosales.

An attorney will be able to advise you of all your rights as a tenant so you can avoid uncomfortable situations down the road.

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