The Complete Guide to Reading Your Lease

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The Complete Guide to Reading Your Lease

Searching for a new apartment is always stressful. When you add a legally binding document to the mix, it can make you want to pull your hair out.

We at Pangea believe you should have the tools to understand your lease thoroughly. That’s why we crafted the Complete Guide to Reading Your Lease. In this document, we cover all of the lease terms your landlord or property manager should include in the document as well as some of the things property managers or landlords can’t include in the lease.

If you ever find yourself in a position where you are unclear about a lease term, you should always hammer out the details with your landlord or property manager. Make sure you get the terms of your agreement in writing to avoid any potential conflicts in the future.

Signing a lease shouldn’t be a process you dread. You should feel comfortable and excited to sign your lease. Continue reading to learn how to make that happen.

What Is a Rental Lease Agreement?

Lease agreements refer to contracts between landlords and tenants for a given piece of real estate. These agreements outline the terms upon which both landlord and tenant agree in a clearly stated and signed document.

Rental lease agreements should include all pertinent information regarding the property in question. Examples of the types of information included are the following:

  • The type of real estate.

  • Monthly rent amount.

  • The lease term

Security deposits are also included in these agreements even if you opt for a month-to-month lease. Depending on the real estate in question, the lease can include house rules on pets and smoking within the unit. All lifestyle preferences should be included in the lease agreement to avoid disagreement in the future.

If you fail to get your lease terms in writing, legal action can be messy and difficult to enforce. Verbal agreements are hearsay in the eyes of the court and without explicit written agreement, your word won’t establish any validity to your claim.

As a tenant, there is no debate. Always demand a lease agreement. If the prospective  landlord refuses, do not live there.

Who Signs the Lease Agreement?

Leases should name the people who enter into the contract and are legally bound to it. That means you, your spouse, roommates, and the landlord should be mentioned in the lease. Anyone not mentioned on the document is not legally liable for rent. A good example of this at concept can be seen with someone subletting their apartment.

If you sublet your apartment, the subletter will not be held responsible for the damage to your apartment or the rent payment if they are not in the lease. It’s simple, if you have someone living with you and they are not in the lease, they are not responsible to uphold the lease terms.

General Information About the Property

The lease agreement should include all the pertinent information about the property itself. This includes address, the landlord or property manager’s name and contact information, and the exact dates of when the lease begins and ends.

Lease Terms

There are several types of lease agreements but most are for one year (term). However, month to month leases (periodic) are very common and are increasing in the remote work environment. Lease terms should include how much rent the tenant pays each month and when that amount is due. They will also cover the security deposit amount and the lease end date.

Rent Term and Monthly Rent Amount

Your lease agreement should clearly define the length of time you can stay in the docile. It should also state the monthly rent amount and any late fees you have to pay. Some lease agreements charge flat late fees while others add fees for each day you don’t pay.

If there is any uncertainty regarding the amount of monthly rent you are required to pay as well as the deadline for that rent, you must ask your landlord to state these elements in the lease. Doing so protects you from the landlord unexpectedly increasing the rent during the middle of the lease. It’s fairly common for landlords to increase your rent at the end of a lease, but there are also rent caps in some areas that might protect you.

Security Deposits

Security deposits are upfront payments to the landlord to protect their investment in the event the tenant damages property or leaves it in poor standing. Many landlords and property managers require you to pay the full amount of the first and last month’s rent to cover any unexpected damages. Some areas have laws in place that dictate a maximum deposit landlords can collect.

The lease agreement should outline the circumstances that would lead to the withholding of your security deposit. For example, landlords and property management companies commonly identify painting and carpet cleaning as fair game for the security deposit. You should also look for the specified deadline by which you must receive your security deposit from the landlord or property management company. If there is not one specified in the lease agreement, demand it.

Pets

Landlords might have specific restrictions against housing a pet in the unit. Those that have these in place often charge additional fees for housing the pet. These fees might be flat or nonrefundable and they can also be an increased charge to your monthly rent. The reason for this surcharge is because pets are more likely to cause wear and tear and require further cleaning. Ensure your lease clearly identifies what type of pets are allowed in the unit, how many, and any fees associated with keeping pets.

What Is Included In Furnished Apartments?

If you opt for a furnished apartment, the lease terms should designate what will be in the apartment when you arrive. The list might include things such as appliances and furniture. It should also include provisions for any damages that occur to the property. In this case, damages will most likely be taken out of your security deposit.

Additional Fees

Landlords can charge additional fees outside of the monthly rent, security deposit, and pet fees. These charges depend on the property type but can include parking, utility, trash services, administrative, and notice fees. There can be rental taxes attached to the unit, which are typically charged as a percentage of the unit. You should ensure you understand all of these fees clearly before entering a lease agreement.

Lease Termination Deadline

You need to consider the time you have to notify your landlord or property manager if you intend to move out or renew your lease. Some states require a 60-day notice of termination while other states are more lenient or stringent. Landlords also might let your lease turn into a month-to-month at the end of the term. However, you must receive express consent that will occur before banking on it. You should also confirm with your landlord the month-to-month lease has been made once your yearly lease ends.

Maintenance

One of the benefits to renting is that you don’t have to pay for major repairs or maintenance. If a major appliance or system fails, the landlord will likely be required to fix the issue. However, your lease should clearly spell out what the landlord is responsible for in your lease. It should also include a clearly defined timeline for the fixture of those items.

State laws mandate landlords and property management companies keep your property in decent living condition. If your landlord refuses to fulfill a maintenance request, check your state law. There might be something in the code that states they are responsible. Your lease should also clearly lay out the instructions for filing a maintenance report and to whom they should go.

Subletting Information

The restrictions regarding subletting vary depending on the lease. It can be tricky to sublet your apartment – the subletter will not be held to the same standard as you and if someone else damages your apartment, the liability will still fall on your shoulders. Your lease might also prohibit subletting, so you should carefully review the documents before committing to anything.

Early Termination Policy

Job transfers, family circumstances, or deciding to buy a house are all potential reasons that might prompt you to try and leave before the end of your lease. Ask your landlord about a potential termination clause in your lease, which can typically require you to provide advance notice to break the lease early. It will also potentially establish a flat, nonrefundable fee.

Landlords in popular markets might be more likely to offer early terminations. Doing so will allow them to fill the vacancy quickly. Early terminations might be more difficult to negotiate in slower rental markets.

Roommates

If you choose to rent with someone else, landlords will typically require you to add them to the lease. This creates a joint responsibility for anything occurring in the house. You both must ensure rent is paid on time and the lease items are followed. If you rent with a friend, and they don’t pay their share, you will still be left holding the bag if they decide to skip town.

Evictions

Landlords can enact an eviction if the tenant doesn’t pay their rent or they breach their end of term lease agreement. They cannot demand you move out immediately and they must give notice. This process operates under the state law but all states require an eviction notice that addresses the issue, such as a late rent payment, or an unauthorized pet. They also don’t have to give you a chance to remedy the situation.

They can simply demand your eviction unconditionally. Unconditional evictions occur for offenses such as frequent late payments, smoking on the premises, or committing crimes on the property. If you fail to respond to the notice, the landlord or property manager can file a civil suit against you and terminate your tenancy.

Tenancy termination varies depending on your state and some states let landlords and property managers act faster than others. You might have a plausible defense in court, such as a landlord failing to follow paperwork procedures for eviction. If you don’t appear in court or the judge rules in favor of the landlord, the landlord must provide the judgment to local law enforcement. Then, the law enforcement must deliver it to you. In these cases, you would be given a short amount of time to gather your belongings under the escort of an enforcer of the law.

Since the early days of the pandemic, most renters have been protected from evictions via the moratorium. However, the moratorium ended in July of 2021 and it also didn’t apply to all renters.

Clear Identifications of Wear and Tear

Your rental agreement should clearly identify the definition of wear and tear it carries for the property. Is it okay to paint the wall so long as it’s with neutral colors? Are they allowed to hang whatever they want or will they get charged for nail holes?

You must confirm these details with your landlord and try to incorporate them into your lease terms since they can affect the security deposit. If the property clearly defines painting as beyond the scope of normal wear and tear in the lease, you may lose a portion of your security deposit.

More Legal Aspects to Consider

Joint and Several Liability

One legal aspect to consider more is the idea of joint and several liability. We mentioned earlier that if you live with a roommate, you both will be held responsible. But here, let’s dive a little deeper into what that means.

The definition of joint and several liability can get a little tricky. At its most basic, it means that both parties on the lease will be held liable for the lease terms both together and separate.

In other words, it doesn’t matter whether your roommate was the one late on rent. Since you are both beholden to the total rent amount, any late payments or failure to pay falls on your shoulders even if you paid your share.

Property Left Behind

Laws can vary widely regarding the property left behind after a tenant vacates the premises. In most cases, the landlord can follow whatever rules they deem fit if you leave property behind. There are exceptions to this and you should double-check to ensure you are not in danger of losing property if you forget it when you leave.

What Are the Specifics of the Lease Shift from Term to Month-to-Month?

There is some ambiguity regarding what happens once a term lease expires. For example, most leases dictate you must give at least 60 days notice to end the lease. Most also naturally transition from a term to a month-to-month lease at the end of the date of the lease if you choose to stay.

This means the rules and terms in your initial lease would transfer to the new, month-to-month lease. However, you should do your due diligence to ensure nothing in the lease changes. Landlords and property managers might try to up your rent once you begin your periodic lease and there might be something in the lease terms that lets them do so.

Additionally, there are some cases that involve tenants and landlords doing something for so long the established routine might be more enforceable than the written one. Estoppel is the legal term for this and describes a legal action that prevents a party from making claims that they previously established as bunk. In other words, if a landlord accepts rent for years in the form of a direct deposit check, they can’t come back and say it wasn’t allowed, even if it is in the lease.

Legal Cancellation of a Lease

There is a long list of lease terms you don’t have to follow even if landlords and property managers put them on the lease. In these cases, you can consider the lease DOA. Even if the landlord doesn’t choose to act on these terms and merely writes them into the agreement, the tenant can cancel the lease entirely without the landlord’s consent. Below, we list the most common.

List of Legal Clauses Landlords Cannot Include In Their Lease

  • Threats against the tenant for calling 911 for their safety as part of the lease. For example, if the lease were to stipulate eviction after you call the police five times. There can be no limit to your calling an emergency number in the event you are in danger.

  • The landlord claims if you don’t follow the terms of the lease, you must make a rent payment sooner than normal. An example of this would be a landlord or property manager trying to make you pay the full amount of rent on the day they find a pet in your house.

  • The landlord cannot make the tenant responsible for filling their vacancy. For example, if you vacate the premises, you can’t be held responsible to fill it.

  • The landlord must go through the courts to process an eviction. Evictions require legal proceedings and your landlord cannot simply demand you leave with no notice and say they’re going to change the locks.

  • The landlord cannot automatically demand the tenant pay for court charges if they want to take them to court. The judge must decide whether the tenant is responsible for the court charges.

  • Landlords do not have the right to write that they can represent the tenant in court.

  • There cannot be any clause suggesting the tenant can’t sue the landlord for their failure to uphold their responsibilities.

  • The tenant cannot be held responsible to repair the rental in the event of a disaster.

  • The landlord must be liable to make repairs. They cannot write a clause that relieves them of their maintenance duties.

Tips to Consider Before Signing the Lease

Before you sign the lease, you should read through it thoroughly because once you sign it, there’s no turning back, it becomes legally binding. For any questions regarding the lease, you should ask for clarification from your landlord. If you want to make changes to the lease, you can also request that from your landlord before signing the document. Both you and your landlord should initial and sign the document.

Keep Thorough Records

You should save a copy of the final lease signed by the owner or manager. It is the most important document to keep throughout your stay and can protect you in the case your landlord or property manager tries to make unfounded claims regarding your tenancy.

Bottom Line- The Complete Guide to Reading Your Lease

When it comes to reading your lease, things can be complicated. Some shady property managers or landlords might try to put things in the document that are not allowed. It’s important for you to check the document thoroughly before signing it so you are comfortable with the terms regarding your tenancy.

At Pangea Real Estate, we believe you should have access to all the renters’ resources you need to make an informed decision about your tenancy. When you sign a lease with us, we want you to feel at home. That’s why we included this guide. You can use it to ensure all of the details regarding your lease are covered.

If you’re looking for a place to live in the Baltimore, Chicago, or Indianapolis area, Pangea is here for you.

>Contact us today to find your new home with Pangea.

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