You have searched every apartment complex in the area and found the perfect place. With a steady job, good credit score, references and enough money for the security deposit and first/last month of rent, you're ready to go. However, with different types of contracts and regulations, there are certain things you should look out for before you sign a lease.
A lease is the legal document that gives you the right to live in the residence for an allotted amount of time. Though you may want to sign the lease quickly, so you can get the keys to your new place, take a step back. Signing a legal document like a lease can hold severe consequences if you don't abide by the fine print.
This guide offers tips on what to look for in a lease and knowing what you are getting yourself into before you sign name on the dotted line.
Is it a fixed-term lease agreement or a month-to-month contract?
A fixed-term lease is a contract for an unchanging amount of time, usually written as one-year or six-months.
A month-to-month lease is a bond stating that you will reside in the apartment for at least 30 days. There are two very important things to note about a month-to-month lease:
- You must notify your landlord that you are leaving after a 30-day period
- If you fail to notify anyone you are leaving, the 30-day agreement is automatically renewed for at least one more month
- Your landlord has the right to terminate your lease and ask you to leave, giving you 30 days to relocate
How much is your rent and what extra fees will you need to pay?
Most leases call for the last and first month's rent paid upfront. Though it seems like a hefty price to pay, it's worth it in the end since you will not have to pay your landlord the last month you live in the apartment.
The security deposit, usually set aside in an account that accrues interest, is for any damages you may cause to the property while living there. If you don't cause any damage to the property, you'll receive your deposit back in full with interest.
Other fees that may be found in a lease are:
- Broker's fees if you needed help finding the apartment
- Storage fees for units outside the apartment itself or extra garage space
- A pet deposit for each cat or dog living on the premises full-time
As far as the final cost goes, that greatly depends on the amount of monthly rent, security cost and price for additional noted services. An approximate figure for a one-year lease on a one-bedroom apartment in New York City (including all five boroughs) is priced at $3,100 a month. If you include first and last month's rent, you're looking at over $6,000 for your first payment.
Do you understand the lease's rules and regulations?
The most important rule of a lease is to pay your rent early or on time every month. There is often a grace period of a few days that gives the tenant a little extra time to come up with the cost. However, after this period of forgiveness, landlords are not so forgiving. If you stop paying your rent, you will be evicted.
While paying your rent on time is a pretty obvious rule, others are not so transparent. Research the state and local landlord-tenant laws in your respective area to determine whether certain rules in your lease are legal.
An example of such a situation would be if you rented the apartment with the understanding that you were allowed to have at least three social events a year in the unit, and after signing the lease, a rule is made restricting you from any parties at all. In such a case, you can request that you be "grandfathered" in, which states that the new rule was not in affect when you signed your lease, and you do not have to abide by it.
TIP: Even if you go over your lease with a fine-tooth comb, have another set of eyes glance at the agreement to make sure you didn't miss anything.
Common rules covered in a lease:
- Occupancy rules and right to sublet
- Responsibility of every person on lease for the full amount of rent being paid on time
- Date to notify the landlord you plan to leave if renewal is automatic
- Rent due date, late fees, grace period, acceptable payment methods, where payment needs to be sent
- Landlord's legal right of access to property with advance notice in case of repairs
- Restricted illegal activities, like excessive noise or drug use
- Pets allowances -- size, amount, species restrictions
- Reasons to change or end tenancy
- Amount of parking spaces or garage access
- Rent control clause
- Fees for breaking the lease and moving out early
Is the lease a fully binding contract for both parties?
Only a properly executed legal document is binding, so make sure both parties read and sign the lease before accepting the keys and moving in.
A breach of the agreement could lead to legal action against you if you decide to no longer abide by its rules. The most common method of breaking a lease is moving out before the fixed-term is up.
- If your apartment has become seriously damaged due to a natural disaster, if you fall severely sick, if a person on the lease dies or if you are called away on military leave, most apartment complexes will allow you to break your lease and move out early without penalty.
- If your landlord fails to repair or maintain your apartment, invades your privacy or does not rightfully defend you against disturbing neighbors, you can take the matter to court. If you prove the landlord has breached their end of the bargain, you will not be penalized for moving out early.
- In the worst case scenario, if you have no good reason to break your lease but you do so anyways, you are liable for all the unpaid rent you promised to pay. For example, if you only paid six month's rent on a 12-month lease, you are legally responsible for the rest of the unpaid rent.
Sometimes, you must only agree to pay until they find a new tenant. However, if you just move out, many will take legal action. Remember this when you sign your lease. If you are worried you'll need to break the lease, it may be prudent to sign a month-to-month contract instead of a yearly lease.
Who needs to sign the lease?
At its core, a lease is a contract between those who are renting a space (the renter) and the person who owns it (most often this is the landlord). Anyone who plans to live in the apartment should have their name on the document, so they are legally bound to what is written in the lease.
A lease will specify the occupancy limit, so only the names on the contract as well as the minor children of those people will be allowed to live on the premises. This also makes each person legally responsible for all terms and all of the rent.
If you are living with roommates, and someone skips out on their portion of rent, you will need to pay it for them. Likewise, if your roommate violates a rule, the lease for everyone in the apartment is susceptible to termination.
In addition, the person who is responsible for managing the property sign the lease under their contact information.
Who is responsible for repairs?
Renting a place to live can be a balancing act between yourself and the landlord. Certain responsibilities will fall on each party, depending on the circumstances.
Review your lease concerning repairs to the property:
- Are there any cases where you'll be held accountable?
- What has your landlord vouched to be responsible for?
- If your lease allows you to renovate or modify the space, do you need to get permission first?
When you're starting something new and exciting like moving into a new place, you may more inclined to only think positively. However, it's important to be prepared for any problems that may come up and what you will have to take care of in case of an emergency.
You should read through everything thoroughly before you sign. Remember, anything that is not on the lease is not legally binding. Once you're satisfied with what you see, you can sign and move in!