Legalese for Renters: How to Review Your Lease

Signing a lease agreement is always an important financial issue and is one where you should give special attention. Leases seem to get more complicated each year and it is important to know and understand the different terms and sections of a lease and how they impact you. Leases are legally binding documents and if you sign the lease, you have to live within the rules that are specified in the agreement.

Each landlord or company will have similar agreements, though with a few varying elients, and the laws of each state will also be somewhat different. Your lease could be simple and only two pages in length, or complex, with fifteen pages or more in addition to added addendums. This all just depends on the landlord. This article will cover the basics, from general clauses from a state association of real estate professionals lease to other common lease clauses. However, the one your landlord uses can have different and varied rights and responsibilities.

The most important task you need to complete is actually taking the time to read the document, understand the terms, and be comfortable with the issues, duties, and responsibilities detailed in the lease.

Key Points –The key points you need to make sure match with what you agreed upon with your landlord are terms like the monthly rental amount, security deposit amount, utilities information, penalties for late payments, term of lease, lease start and end dates, allowed tenants and pets, and other terms that might apply to the property, like following any special rules and regulations. You have to live within these terms, so make sure they are acceptable to you.

Here are the basic parts of a sample lease, with some sections containing notes to alert you to important issues you should consider:

Typical Sections and Clauses of a Lease Agreement

The Basics and Vital Issues to Review

  • Property address, landlord, and tenant names
  • Term of lease, dates – Make sure these match what you agreed upon and that you understand how it changes when the lease goes month-to-month after the initial term
  • Joint and individual obligations – Typically everyone on the lease is liable for all the terms of the lease
  • Any addendums to the contract – Could be related to many different issues like special rules for the unit, maximum number of occupants, pet addendums, satellite dish addendums, or any issues the landlord addresses

Rent and Money Issues

  • Rental monthly fees
  • Security deposits and pet deposits
  • Move-in costs and when funds are due
  • Late charges and bounced check fees
  • Parking, storage information and costs – What areas are included with your monthly lease payment and what costs extra
  • Utilities – Who pays for utilities and how pro-rations (if any) are calculated. Pro-rations are when you only pay a portion of a bill, such as one-fifth of the water bill in a five unit apartment complex.
  • Return of security deposit – How long after your move-out date before your deposit will be returned?
  • Renter’s insurance – Is it required under the lease?
  • Mediation and attorney fees – In case you and the landlord are in dispute over an issue
  • Guarantees – If a parent or someone else is guaranteeing your lease

Property Condition and Occupancy Rules

  • Condition of property and maintenance – Take pictures at move-in if there are damaged walls, appliances, or carpeting so you have a record of those things. Let the landlord know what you would like repaired.
  • Rules and regulations related to the unit, building, HOA, neighborhood or city/county, pool, common areas, etc.
  • Painting or alteration rules – Know what the landlord allows if you plan on making changes or alterations to the unit
  • Assignment or subletting rules – If you are renting with others and one tenant wants to leave and you find someone to replace them, how is that handled?
  • Keys and possession of the property
  • Tenants obligation upon vacating premises – Know the cleaning requirements and fees for damages done to the premises and for what you can be charged

Landlord Rights

  • Landlord's right to enter unit – Most state laws allow landlords to enter the property in emergencies or with 24-hour notice for normal inspections or repairs. Review your lease in case it specifically discusses this issue to ensure that you are comfortable with the lease agreement terms.

Legal and Other Issues

  • Breach of contract – Penalties in case you or the landlord terminate the lease
  • Notices – Where to send any letters or documents to your landlord
  • Entire contract – The written agreement is the entire agreement. Verbal side agreements will generally not hold up in court.
  • Lead based paint, pest control – There may be lots of other disclosures, depending on the state
  • Signature block
  • Lease terminations – Can be governed by the lease, or maybe local or state law, or all of the above

Straightforward Language – Most residential leases are written in plain English so that they are easy to understand. However, as noted above, you have to actually take the time to read the lease so that you fully comprehend the terms of the agreement, your rights, and your duties during your occupancy.

Special Issues to Understand – One of the items to make sure you understand if you are renting with another individual is that all parties on the lease are jointly liable and responsible for the terms of the lease. Therefore, if you are renting with another person, make sure you are comfortable that they can pay their fair share of the rent, or you may be obligated to pay their rent at some point.

Need to Break the Lease? – For a variety of reasons, people occasionally need to break leases. The best way to handle this is to be professional and responsible about it. Let the landlord know as early as possible and work with them so that they can get the unit re-rented from the day you need to break the lease. State law may require that they have to let you out of the lease if you find another tenant that they accept. Gary Laturno, a San Diego attorney and real estate broker at Laturno Kuick Realty said, “Few landlords are going to spend the time to chase renters into court or put a mark on their credit report if they work with the landlord in a responsible manner."

Know Your Tenant Rights – For additional information on tenant rights in your state, you should Search “tenant rights ____________” and your state name on the Internet. There are plenty of resources available to help you understand your rights under your state laws, which is essential in protecting yourself. You might also talk to a local licensed real estate professional or attorney who handles rental properties.

Understanding the sections of a lease and carefully reviewing the lease terms should assist you in making smart choices on where you are going to live. The issues, items, and tips above will give you a good head start on making choices that work well for you.