A lease or rental agreement is a binding legal document in real estate, requiring both parties to honour the agreement and stick with whatever is stated in the agreement. However, since the general knowledge around lease agreements or rental agreements is usually negligible and people routinely fail to read through them properly and understand what the fine print says, it is imperative that the awareness around leases and rental agreements be raised. Which is why, in this blog post, we will discuss what to look for in a lease or rental agreement when finalizing an apartment.
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Now, lets start by discussing what you should look for in a lease or rental agreement.
What to Look for in a Lease or Rental Agreement?
Whenever you are signing a legally binding agreement or document, it is imperative that the finer details be studied and understood beforehand, since failure to comply with the terms of the agreement could result in legal action being taken against you. A rental or lease agreement for an apartment is no different, so, here are some things that you need to look for in a lease or rental agreement.
- Parties, the Property
Your lease will identify the landlord, the tenant, and the property, or “premises.” Make sure the names and property address are correct. If you are signing a commercial lease and you have a business entity such as a corporation or LLC, you want to name the business—rather than you personally—as the tenant. This helps protect you from liability if something goes wrong.
- Length, or Term of the Lease
This is the amount of time you are legally allowed to occupy the property and legally obligated to pay rent. For residential leases, the term is often one year. Commercial leases typically have multiyear terms.
- Lease Extensions
Many residential leases say that, at the end of the original lease term, the lease convertsto a month-to-month tenancy. This means you can continue to live at the property and pay rent, but either you or the landlord can end your tenancy on 30 days’ notice. A commercial lease is more likely to expire at the end of the term, though it may be renewed for an additional time period.
- The Rent
Your lease will say how much your rent is and when it is due. Make sure the amount is what you’re expecting. Also pay attention to any penalties for not paying on time. Many leases give you a short grace period and then impose a late fee.
- Security Deposit
Most leases require you to pay a security deposit that the landlord will hold and use to pay for any damages you cause. A typical security deposit is equal to one month’s rent, and cannot be used to pay your final month’s rent.
- Utilities
A residential lease should say who is responsible for utilities, such as electricity, gas, water, and trash service. Commercial leases may use industry terms like “triple net” to describe landlord and tenant responsibilities. A commercial realtor or real estate attorney can help you understand your responsibilities and the commercial lease terminology that’s used in your area.
- Lease Dates and Termination Date
The start and end date of the lease should be in the agreement. In addition to it, it should also clarify how and when the property owner and renter can finish the lease. For example, a residential lease may be ended with one month’s note and a final month’s rent.
- Details of Security Deposit
A security deposit is the amount of money a rentor provides to the landlord to hold in case of any damage to the property during their lease. According to the best realtors make sure your lease agreement has a description of the amount of the security deposit, how it is to be paid, with the terms of its future release. This can help a lot after a lease is over to protect both parties from unfair treatment.
- Tenants of the Property
In some cases there will be temporary tenants or tenants that responsible for rent, such as children or an elderly parent. The lease agreement should enlist the names of every person who will regularly dwell in the property and what happens if a person stays for more than a certain length of time.
- Pet Policy
The lease agreement should specify whether or not a tenant is allowed to have a pet. If it is allowed there should be detail about the type, number, size, breed and any what the additional cost is required to pay for the pets.
- Who will Pay Repairs and Damages
Make sure the property condition is accurately illustrated in the agreement and what the tenant’s and landlord’s responsibilities are for repairs and problems. The lease agreement should also describe whether the landlord or tenant is responsible for damages to the property and what is defined as damage and what is simple wear-and-tear. In addition to tenants ability to make changes to the property while living there and if they are responsible for changing it back before they vacate the property.
- Landlord’s Right of Entry
The lease should comprise a portion that allows the property owner to enter and examine the land with reasonable notice. Ensuring these things are clearly outlined in a rental agreement can save both party headaches and money. An agreement would be simply what it sounds like, something that two parties fully agree on. If you don’t agree to all terms in a rental lease agreement, you need to address any issues before signing.
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