Editor’s note: This is part 1 of a two-part series. Read part 2 to learn how to negotiate your lease.
Congratulations! After a long search, you’ve finally found an apartment you like at a price you can afford. Your application has been accepted, and now all that’s left before you get your new key is signing the lease. Easy-peasy, right?
Not so fast, says Jonas Bordo, CEO and cofounder of Dwellsy. Signing a lease may feel like a formality when you’re eager to move into your new place, but it’s crucial to make sure you have read and understood what’s in it before gracing it with your John (or Jane) Hancock.
“It’s not uncommon for renters to be blindsided by a clause they didn’t realize was in their lease,” says Bordo, coauthor, along with Hannah Hildebolt, of “Everything You Need to Know About Renting But Didn’t Know to Ask: All the Insider Dirt to Help You Get the Best Deal and Avoid Disaster.” “Sometimes an unforeseen rule, regulation, or responsibility is a minor irritation for renters—but other times, it can materially impact their quality of life and lead to major rental regret.”
Leases are formal contracts that are legally enforceable once the landlord and renter have signed them. It’s in your best interest to read every word, no matter how long the document is. A lease can serve as the strongest defense if either party challenges the other.
“Many leases are only a few pages long, but I’ve encountered some real doozies, too — up to 85 pages,” Bordo says. “Most are fairly straightforward and cover basic topics like how much you’ll pay, how long you’ll stay and what you’ll be responsible for while you’re there — but others have so many rules, clauses and conditions, they make tax law seem straightforward.”
He adds, “It’s safe to say that a landlord who will take the time to write an 85-page contract will also take the time to enforce the consequences if you don’t fulfill your end of the bargain — so don’t be caught unawares.”
Bordo’s new book is meant to help people “win” at renting. It covers the entire process, from preparing for the rental search to getting your security deposit back after your lease is up. With several decades’ experience as a renter, landlord, property manager and current CEO of the largest U.S. rental marketplace, Bordo is a trusted authority on all things rental-related.
Bordo shares 13 things to make sure you understand before signing your lease.
1. How much will I need to pay?
The lease should clearly identify your rent amount, but look for other potential costs that may be included: security deposit, pet fees, parking fees, late fees, storage costs, etc. Your lease should also specify which (if any) utilities are included in the rent. If you don’t see them on the lease, assume you’re responsible for paying them.
“New renters especially tend to be surprised by many of these costs, which can add up to 20% or more of your rent,” says Bordo. “You don’t want to discover that your apartment is out of your budget after you’ve signed the lease.”
2. How do I pay rent and fees?
Landlords can be particular about how they want to get paid. Some are old school and want a check or, in some cases, cash. Some take advantage of modern conveniences and would like you to pay online through a portal they’ve set up. Others may ask you to pay via Zelle or Venmo. This is good to know in advance so you can pay promptly.
“A word of warning about peer-to-peer payment methods like Zelle or Venmo,” says Bordo. “These platforms are often used by scammers, so never use them to pay your first month’s rent or other upfront fees. Once you have moved in and established that your landlord is legit, feel free to Venmo your rent.”
3. How long is my lease?
In the United States, a standard lease is usually 12 months — but that’s not always the case. It’s quite common to find 13- or 14-month leases, and there’s an increasing trend to offer 16- or 18-month leases as well. It’s in a landlord’s best interest to keep rental units continuously occupied for as long as possible. No matter how long you plan to rent, your lease document should specify the dates when renting starts and ends.
4. Is there an acceleration clause?
An acceleration clause allows your landlord to end your lease early if they decide to sell the unit. If you see this clause in your lease, take it as a warning that you may be asked to move before your lease is up. This might not necessarily be a dealbreaker, but it’s certainly not something you want to be blindsided by.
5. How many people can live here?
There is often a legal limit or landlord-imposed cap on the number of people who can live in a rental. Be aware that this clause might cover all overnight guests, not just official roommates. So if you’re planning to host your extended family when they visit your city, check your lease first to make sure you won’t be exceeding occupancy caps.
6. Who pays for repairs and maintenance?
Some landlords take full responsibility for all the repair and maintenance, whether it’s a leaky faucet or a broken air conditioning system. Some will repair and maintain major appliances and leave the rest of the repairs on the renter. And some require the renter to handle everything. (If so, hope you’re good at DIY!) If you don’t read the lease, you won’t know what you’re getting yourself into — and it could cost you a lot.
7. Can I have a pet?
Your lease should mention if pets are allowed and if so, any restrictions on the size and breed of pets. Any pet fees or damage-related fines should also be clearly stated.
8. What’s the landlord’s right of entry?
All landlords have the right to get into their rentals under certain circumstances. For instance, does the lease give your landlord unlimited access to deal with emergencies? (This is usually a good thing since an emergency can destroy your home.) Does your landlord have to give you 24 hours’ notice before entering when it is not at your request? Do they expect to complete a walk-through of the unit at predetermined intervals?
“If you don’t see this clause in your lease, it’s worth asking your landlord about before signing,” Bordo says. “I have encountered individual landlords who enter their rental units — often — with little to no warning, much to renters’ chagrin.”
9. What are the community or house rules?
Leases often include rules that set standards and expectations. Usually, these are unsurprising, but not always. Community or house rules might enforce quiet hours, how and when communal areas may be used, what types of alterations you can make, how many parking spaces you can use and even whether you can hang a towel over your balcony. Read this section in some detail to make sure you can live with the house rules.
10. Are there banned activities or substances?
Many leases include clauses that prohibit you from using a rental in certain ways. For example, there are usually clauses prohibiting excessive noise or other activities that might be a nuisance for your neighbors. It’s also typical for renters to not be allowed to run a business from a rental home or apartment. Usually this is the jurisdiction’s rule, not the landlord’s, but it’s included in the lease to protect the landlord.
“Increasingly, landlords are including ‘no smoking’ clauses in their leases that allow them to end the lease and impose heavy cleaning costs on the renter if this rule is violated,” Bordo says. “And often, there are lease terms that allow the landlord to end the lease if any illegal drugs or substances are used in the rental. With today’s unpredictable legal environment around substances like marijuana, it’s great to know before you sign.”
11. Can I sublet or Airbnb my rental?
Depending on your location and situation, you might be interested in making a bit of money by renting your place for a night here and there, or getting out of the lease early by passing it over to a friend or new renter (a sublet). Your lease will say whether or not these activities are allowed by your landlord.
12. What happens at the end of my lease?
This varies widely, often according to regional norms. In some places, it’s typical for leases to just end, with no provision for ongoing residency. In others, it’s common for leases to turn into a month-to-month lease after the first 12 months.
“You may also have some right of renewal, potentially at a prenegotiated rent level, which can be highly valuable if you want to stay in your place at the end of the lease,” Bordo says. “Just scrutinize any language about rent increases at the time of renewal so you aren’t blindsided. Your lease should also state how much notice you must give if you want to move out.”
13. How do I get my security deposit back?
Usually there will be specific language about the security deposit return and what it means to satisfy the return requirements. Most landlords will require some amount of cleaning and restoration work before you move out. If you don’t want to do all the scrubbing yourself, some landlords have preferred cleaning companies that will check all the boxes on the cleaning list —guaranteed — so be sure to ask.
“While all leases are different, these are the main things you’re likely to see,” says Bordo. “If you have questions about a particular clause, your leasing agent or landlord should be able to answer your questions. Be sure to get all amendments and additions in writing before signing.
Bordo concludes, “Remember, the lease is often a sign of how easy or hard the landlord will be to get along with. Highly complex leases aren’t usually a good sign. If yours is, you want to think hard about finding another landlord who’s easier to deal with.”