Don’t Sign a New Lease Until You Know These 12 Things

Don’t Sign a New Lease Until You Know These 12 Things

If you’re looking for an apartment, you’ll soon have the “fun” task of reviewing your lease — a legally binding agreement that dictates your security deposit, termination date, obligations as a tenant and, of course, how much money you’ll be forking over each month. It's a dense document, but to fully protect yourself, pay special attention to these details before signing on the dotted line.

1. The Termination Date and Renewal Options

The standard lease agreement is 12 months, but yours may be different depending on what you and your landlord agree upon, says Marin King, an attorney and real estate agent at Keller Williams Realty in New York City.

Most contracts require you give the landlord anywhere from 30 to 90 days’ notice if you’re planning to renew the lease. If no notice is given, the lease either expires (read: pack your bags) or transitions to month-to-month, which could result in a rent increase. Another possibility: The lease may even auto-renew for another year if you don't state otherwise, leaving you locked in at a potentially higher price.

Speaking of, your landlord must give you advance notice if they plan to raise your rent for the next leasing period. How much notice will depend on state requirements, but it’s generally within the same period you’re required to give notice for renewal, says Michael Vraa, managing attorney and hotline director at HOME Line, a nonprofit tenant advocacy group in Minneapolis.

2. The Security Deposit

This is usually equivalent to one month’s rent, but it can vary based on your credit score. “If your credit is poor, a landlord may ask for two months’ rent,” King says. “It’s another way of reassuring the landlord that you’ll pay rent each month.”

When will you get the money back? A standard lease states the landlord is required to release the money within 30 to 60 days after you vacate the property if you’ve met all of your obligations, such as making all rent payments, moving out of the apartment on time, returning the property in good condition, etc.

RELATED: Spending More Than 30% of Your Paycheck on Rent? Here's How to Cut Costs

3. Your Rent’s Grace Period

This is how many days you have after your rent is due to pay without incurring a late penalty, and it varies by state. If you don’t pay rent before the grace period expires, you’ll be charged a late fee — which could be either a flat fee or a percentage of the monthly rent, King says.

4. What Fixtures Will Be Provided

Permanent kitchen appliances (like a stove, oven or dishwasher) are typically included in your rent. However, if you viewed a unit with removable fixtures — window shades, pool equipment, a plug-in microwave — you’ll want to double-check in your lease exactly what the landlord will be providing you. In some cases, you can rent furniture for an extra fee, or you can coordinate with the previous tenant if they’re leaving any appliances behind.

5. Remodeling Restrictions

Most lease agreements require you to get the landlord’s permission before making adjustments to the property — even cosmetic changes. “Painting a room might seem perfectly innocent, but if you spill paint on the carpet, you’re going to be responsible for it,” Vraa says. If you make changes to the apartment without the landlord’s consent, they could use your security deposit to pay for the costs of returning the property to its original condition.

RELATED: The Renter's Guide to Renovations (or, What's Actually Worth Doing)

6. The Condo or Homeowners Association’s Rules

If your apartment is part of a condo or homeowners association (HOA), you must comply with the community’s rules and regulations. These may dictate parking restrictions, landscaping requirements and move-in procedures.

Pro tip: “You can’t trust the landlord to know what’s in the condo association’s rules,” says Vraa, so get a copy yourself from the association’s office or website.

7. The Number of Occupants Allowed

Many cities have fire codes that limit the number of people allowed to sleep in a room. A condo or homeowners association may also restrict how many people can live in a rental property. This affects whether you’ll be able to add people to the lease later on. For example, if you decide in six months to turn the living room into an extra bedroom for a new roommate, you may not be able to if you’ve already reached the maximum number allowed for occupants in the unit.

8. The Guest Policy

Many rental agreements restrict how many days someone can stay at the property if the person isn’t on the lease. In other words, you’ll want to know how long someone can crash on your couch before you sign — or extend the invite.

9. The Subletting Policy

Say you get relocated for your job; you’d probably want another renter to take your place and pay for the remainder of your lease. However, “the default rule nationwide is that tenants can’t sublet without the landlord’s written permission,” Vraa says.

There are exceptions, like if you’re in the military and get transferred, in which case you’re allowed to terminate the lease early, he adds. Some leases also include buy-out clauses that enable you to break the lease early as long as you pay a penalty (two months’ rent, for example).

10. The Pet Policy

If you have a pet, expect to pay a one-time or monthly fee in addition to your base rent. There may also be restrictions on the type of animal, breed or size. Service animals, however, are exempt under the federal Fair Housing Act, which prohibits landlords from discriminating based on disability.

11. Tenant Insurance

Many leases require tenants have renters insurance. Even if yours doesn’t, taking out a renters insurance policy can be a good idea to protect you financially if there’s a fire, robbery or some other emergency, King says. Fortunately, the average renters insurance policy is only $187 a year, according to financial research firm ValuePenguin.

RELATED: 8 Times It's Smarter to Rent a Home Than Buy

12. Access to the Premises

Landlords are entitled to check your home’s condition and show the property to prospective tenants if you’re not renewing the lease. However, the rental agreement will stipulate how much advance notice — typically 24 to 48 hours — the landlord must provide you before entering the property. If your landlord enters the property without giving proper notice, there could be legal repercussions. “The police could charge the landlord with trespassing in extreme cases,” Vraa says.

A Final Note: Rental Agreements Vary from State to State

One reason leases are so complex is because landlord-tenant laws can differ significantly by state, Vraa says. As a tenant you have a number of protections, but because landlords write the lease, you can expect they’ll make the terms favorable to them. The good news is, aside from a few government-mandated requirements, the terms of your lease agreement are negotiable if you’re willing to advocate on your behalf. And fortunately, many states have tenants’ rights centers or landlord-tenant law offices that offer free advice to renters.

Learnvest

Financial planning made simple.

Get your free financial assessment.

Related Tags

Get the latest in your inbox.

Subscription failed!

You're Now Subscribed!