When renting a house or apartment, there are dozens of moving parts to consider. Budget, neighborhood, square footage, whether or not pets are allowed—these are all things to keep in mind when looking for a home that meets your needs. One of the most important steps that people tend to skip is reading the lease carefully before signing. To guide you through the process and help you protect yourself and your family, we put together a list of 10 important things to consider before signing a lease.
1. Rent and Utilities
The monthly cost of rent is perhaps the most important aspect to consider when reviewing a lease agreement. When you find your dream apartment or house, it can be tempting to want to stretch your budget a bit. However, it’s important to not give into temptation to avoid future problems. Remember to confirm what services are and aren't included in the rent. Some utilities are usually covered (like water and electricity), but others, like internet, are the renter's responsibility.
Generally speaking, it’s recommended that your rent shouldn’t surpass 30% of your income. That doesn’t mean that you have to look for rentals based on that advice alone. You should also budget for living costs that include utilities, internet, any maintenance that you’re responsible for, etc. If you still don’t have a budget, check out this article that we wrote on the topic.
The security deposit is a refundable amount of money charged by the landlord at the contract start date. The amount is usually equivalent to one month's rent, but will vary according to the landlord as well as state laws. The landlord may use this money only if the tenant violates the terms of the lease.
Landlords ask for a deposit to protect their finances. For example, if a tenant leaves the property without paying the last month of rent, the landlord has the deposit to pay for it. If the renter damages the property, the owner can use the deposit to cover the cost of repairs. If there aren’t any damages, and the rent has been paid in full, the landlord will return 100% of the deposit to the tenant when the lease is up.
3. Maintenance and Repairs
It’s not uncommon for disputes to occur between renters and owners about who’s responsible for covering the costs of minor damage. Homeowners are responsible for any damage, regardless of the cost. However, when the property is a rental the matter gets a little more complicated. Sometimes landlords are responsible for these repairs, while in other instances the tenant is expected to cover them.
In addition to repairs for minor imperfections, every home requires regular maintenance to keep it in good condition. The cost and responsibility for this can fall on either the tenant or landlord depending on what needs to be done and the contract stipulations.
This is why it’s extremely important to read your rental agreement carefully and find the clauses that mention which types of repairs the property could require and who has to pay for them. Generally, state laws require landlords to keep their properties in good and liveable conditions. It’s in your best interest for the lease to include this information. If your contract doesn’t have this type of clause, ask the landlord to add it to prevent future disputes.
4. Residents and Visitors
Most leases in the U.S. include clauses that limit how many people can live on the property. Generally, only two people are allowed per bedroom. This can vary depending on the size of the rooms and local or state laws. Generally, there aren’t many restrictions on short term visitors. Regardless, before hosting a guest look over the contract to avoid problems with your landlord.
5. Breach of Contract
Leases generally have an early termination clause which protects the property owner. This defines the terms and determines any fees the landlord may charge if the tenant leaves the property before the lease is up.
Keep in mind: Some leases can be month-to-month, but this only tends to be worthwhile if you already know that you’ll need to move within a year.
If you have a pet or want one in the future, you’ll have to find a pet-friendly household. Landlords will stipulate in the lease if the property allows pets (and what kind). Some landlords require an additional deposit to protect against potential damage caused by the animal. They’ll probably charge a separate fee, which could either be a one-time payment or built into your rent. There may also be restrictions on the pets allowed. For example, some landlords only allow cats or impose a weight/size limit for dogs.
7. Additional Fees
Your rental agreement will define the fixed amount you’ll pay per month, but there may also be additional fees. For example, the landlord may charge for pets, parking, garbage collection, or pest control, to name a few. You’ll also have to consider any late fees if you don’t pay your rent on time. It’s important to review your lease carefully to understand those fees and avoid unpleasant surprises.
8. Renters Insurance
Some owners require tenants to take out a renters insurance policy. This covers part of the expenses in case of certain accidents or unexpected events.
For example, if you’re cooking and accidentally start a fire, you’d be responsible for the damages to the property. If someone is visiting you and they trip and fall in your home, you could be liable for their medical bills. In these cases, the insurance would cover part of those costs. Likewise, if someone breaks into your home, the insurance would cover part of the cost to replace the stolen property. The lease will indicate if this type of insurance is required and what your policy must cover.
9. Homeowners Associations
Homeowners associations (HOAs) are self-governing groups that create guidelines to help keep a neighborhood, building, or condominium clean and orderly and make sure that everyone follows the rules. If there's a homeowners association where you’re thinking about renting, consider the following:
- What are the rules?
- How much are the fees?
- Who is the HOA point of contact?
Make sure all of this is clearly established in your contract so you don’t run into unexpected issues.
10. Modifications to the Property
In most cases, modifications to rental properties are not allowed. This includes painting the interior another color or drilling holes in the walls. Sometimes these changes are permitted if the tenant agrees to restore the property back to its original state before moving out. Read your lease carefully to make sure that you know what types of modifications are allowed to avoid penalty fees or deductions from your security deposit.
Keep in mind: If you rent a property where making holes in the wall with nails or screws is prohibited, there are plenty of other ways to decorate your space without damaging the walls.
Understanding Your Rental Agreement Will Save You a Ton of Headaches!
Moving is both an exciting and stressful experience. We hope that our advice makes you feel more at ease when it comes time to sign your lease. After all, this is not a decision to be taken lightly! If you consider each of the points above, you'll be much less likely to have problems with your landlord in the future.As always, if you have any questions, feel free to contact one of our experts at any time using our chat. They’ll be happy to help you and answer any questions that you may have about this subject or others featured on our blog.