Things to look out for when signing a rental lease

Written on August 29, 2017 by

Contract SignatureMany renters don’t bother to read the lease before they sign it. This is a huge mistake.

As long as landlords comply with their state’s landlord-tenant laws, they can put any clause they like in a rental lease. And some landlords add strange things.

One Arizona landlord wanted to put a clause in her lease that would require tenants to give her the names and IDs of visitors who stayed longer than five days. Another landlord prohibited treadmills, and another required tenants to care for his pet parrot. None of those clauses are standard.

If you sign without crossing off any odd or seemingly unfair clauses, you’ll need to live with them for the entire lease term. Why? Because a signed lease is a binding contract. The exception is if clauses in the lease violate state law. For example, in Georgia and California, it’s illegal for a landlord to include a lease clause that waives your right to a jury trial in case of a dispute with your landlord. You can look up your state laws here.

So read the lease, before you sign, no matter how boring it may be. While you’re at it, here are six things to look out for when signing a rental lease.

1. Early termination fee

When you sign a lease, you’re basically agreeing to pay the total cost to live at the property for the lease term. For example, if the lease agreement is for 12 months at $1,500 a month, you’re agreeing to pay $18,000 to live there for a year. But you pay that amount in 12 equal installments. So if you need or want to leave before the lease is up, you’ll probably still be liable for the balance of that $18,000. Although the landlord must try to re-rent the place, which will get you off the hook for the balance, if they aren’t successful, you’ll need to pay it.

The exception: if the lease specifies an early termination fee. If you have an early termination fee in your lease, you’ll be able to pay that fee and move on. What you need to pay attention to, before signing the lease, is the amount of the fee. If it seems high, you can try to negotiate the amount down, but the landlord doesn’t have to agree with your suggestion.

2. Termination policy

Most leases are for a specified time frame, such as 12 months. Read your lease to determine what happens when the lease term ends.

You might need to let your landlord know if you wish to renew your lease. If you stay without signing a new lease, you become a month-to-month tenant. Your landlord may allow this, or they may not.

Sometimes leases automatically renew unless you give notification that you will be moving. It’s important to know this information ahead of time so there will be no surprises at lease renewal time.

Related: Ask Lucas 006: Is a Lease Terminated when the Property is Sold?

3. Pet fees and pet deposits

If pets are allowed, you need to find out whether there are any fees or deposits associated with them. The policy should be detailed in the lease.

Some landlords charge a pet fee. This is a non-refundable payment that landlords charge tenants for the privilege of letting them keep pets on the property. It doesn’t cover any damage your pet might cause. You would pay extra if that happens.

A pet deposit is typically refundable if your pet doesn’t cause any damage. However, you should ask your landlord their policy on this just to make sure.

Note that if your pet is a service animal, the landlord cannot charge a pet fee or a pet deposit. Also note that not all states allow pet fees or pet deposits. So find out if yours does here.

Related: Pet Deposits, Pet Fees and Pet Rent — What’s the Difference?

4. Carpet cleaning

Some landlords get the carpets cleaned between tenants, chalking this up as a cost of doing business. Other landlords expect you to get the carpets professionally cleaned before you move out. If your lease specifies that you need to have the carpets professionally cleaned and you don’t, the landlord could deduct the carpet cleaning cost from your security deposit.

Related: Who is Responsible for Cleaning Dirty Carpets?

5. Late fees

It’s common for landlords to charge tenants a late fee if they pay rent late. However, some states restrict the amount landlords can charge. Find out whether your state has restrictions on late fees and what they are so that you don’t agree to pay something you don’t have to.

And under no circumstances can landlords charge you late fees if no mention of late fees was in the lease.

Related: Charge a Hefty, but Legal, Late Fee

6. Subletting

Many tenants believe they can sublet the property if they need to be out of town for an extended time, for example. But there may be a clause in the lease that doesn’t allow you to do this. If you think it’s likely that you will need to sublet, speak with your landlord about this before you sign the lease. Maybe you can get permission if the landlord can screen the subletter first.

Related: A Renter’s Guide to Subletting Your Apartment

Bottom line

If you run across anything in the lease that you don’t understand, ask for clarification. If you don’t agree with a lease clause, you can ask to have it removed or modified. The landlord does not have to change their lease, but you don’t have to take the place, either.

Make sure you and your landlord have a meeting of the minds and that you have a clear understanding of all the terms of the lease before you sign it.

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