Posted Sep 19, 2013

Making Sense of Your Lease Agreement

A lease agreement may not be high on your list of must reads, but for renters it’s necessary to decipher a lease in order to understand your rights as a tenant before making a commitment to a new home. While the wordy document may appear daunting, there’s no need to be intimidated; a lease is simply a contract granting use of a property for a specified amount of time in return for a specified rent. Lease agreements vary in length and style, however most often you’ll receive a lease agreement as a several page document detailing the legal terms of your tenancy.

In this post, we review the most important sections of the lease to understand so you’re equipped with all the information you need to feel confident as you review your lease agreement and prepare to sign on the dotted line.

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Check the Facts
First thing first, check the rental property’s address and any extra items that may be included with the property such as furniture or storage areas to make sure you’re signing up to rent the right place.

Understand the Term
This section specifies the length of your tenancy. The most common terms you’ll see are a fixed-term lease or a month-to-month rental agreement. Make sure you understand what the term is and what happens when the term is over. For example, in the case of a one year fixed-term lease, do you need to sign a new lease or does the term transition to a month-to-month agreement? Clarifying these details upfront helps to avoid any confusion throughout the remainder of your time in your new home.

Names on the Lease
This is a critical section of the lease if you live with roommates as it specifies which tenants are held accountable for the rental property throughout the duration of the tenancy. If one person is named on the lease agreement, that person alone is liable for the rental property and held responsible for paying rent every month and damage to the property regardless of the total number of tenants occupying the home. For example, if you live with a roommate but only you are listed on the lease and your roommate decides to throw a rager resulting in major damage to your home and then skips town, you’re not only responsible for the damage to the property but also for the entire rent payment. If this hypothetical example in any way resembles your living situation, you may want to consult our posts on How to Establish a Healthy Relationship With Your Roommates and Tips for Asking a Roommate to Move Out.

If there are multiple tenants named on the lease, all individuals in the group are liable for the property.

Rent and Rent Delivery
Ensure the rent specified on the lease is the same price that you and your landlord agreed upon. Take note of your landlord’s policy on acceptable methods of rent delivery, such as in person drop off, direct mail or direct deposit, as well as the consequences faced for making late payments so you can be sure to avoid any penalties.

Security Deposit
Check this section to make sure the provisions of your security deposit are clear and fair. Typically, you will be asked to pay a security deposit of 1-2x your monthly rent and will receive the amount in full upon move out if your rental unit has not incurred any damages beyond normal wear and tear.

Sub Lease Policy
This section will specify the protocol for filling a vacancy in your home. For example, if a roommate moves out can you simply invite another roommate to fill the vacancy, or do you need to add the new roommate to the lease first? Failing to comply with a sub lease policy can result in added fees or penalties so be sure to review this section carefully.

Pet Policy
For all you animal lovers out there, this section is for you! This section specifies if pets are allowed in your property and if so, will include any exceptions to the size and breed of the pets you’re allowed to have in your home.

Parking Policy
Does parking come with your unit? If so, where is the parking space and how much does it cost per month? Your most pressing parking questions are answered in this section of your lease.

State/City Law Rules
It is important to note that any term or policy in your lease is considered invalid if it violates a state or city ordinance. With that in mind, consult your local tenant union or rent board for up-to-date information about notice of entry and grounds for eviction policies so you can ensure the terms in your lease do not violate these laws.

About

Elizabeth is the Communications & Marketing Lead at Lovely where she helps spread the word about Lovely's mission far and wide. She loves corgis, Beyonce and helping renters enjoy the best possible experience in their homes.

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Comments

One response to “Making Sense of Your Lease Agreement”

  1. Thiago says:

    Oh my gosh, this is by far the hardest part. I hate moving just because I know I’ll have to slog through a new lease contract. This does make things seem a lot simpler, though. Thanks for sharing it! Thiago | http://hrpm.ca/index.cfm/Apartment-Listings-North-York

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