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How Apartment Leases Work

You've found the perfect pad -- but now it's time to sift through the lease.
You've found the perfect pad -- but now it's time to sift through the lease.
Tom McGhee/Workbook Stock/Getty Images

Whether you're moving into your own place for the first time, getting a place to stay in for college, or just making a change in your living situation, renting a new apartment is an exciting time. It's also a potentially nerve-wracking challenge, when you consider the cost of the apartment, moving all of your stuff in, unpacking, and getting a suitable roommate. The only constant in apartment life, though, is the lease. In the United States, for the most part, apartments are arranged in complexes or buildings, and are individually rented, or leased out. Apartments are also paid for on a month-by-month basis, as opposed to being purchased outright.

A lease is a legally binding contract, laying out the rules agreed upon between the landlord or property owner and you, the tenant. It can be from one to many pages, but in general, a lease defines exactly how long you'll be renting the apartment (six months, one year, two years and so on) and exactly how much money you'll pay in rent each month (and on what day). Other major points often found include security deposits, first-and-last-months' rent requirement, pet rules, who pays for what utilities, and who is responsible for maintenance and repairs. Even things like overnight guests, pool privileges and parking lot access might get a mention.

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Both the landlord and the tenant benefit from a lease. First of all, it's a clear, specific, written record, and a source of reference in case there are any questions about the terms of living in the apartment. It gives security to the landlord, in that it contractually ensures that he'll have a source of revenue each month and will receive it at a specific time. For the tenant, it provides a locked-in rent rate, as well as a legal statement of the renter's rights, should any disputes arise.

Let's look at what leases cover, including general rules and regulations, roommates, pets, and the quandary of what to do if you need to break a lease.

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An apartment lease tells you your rights, your responsibilities and those of the landlord. Most important are the financial specifics. The lease will tell you how much you're supposed to pay in rent each month, along with fees for late payments, whether certain utilities are covered by the tenant or the landlord, and move-in costs like and a one-time security deposit. Usually, the security deposit is returned to the renter when he or she moves out -- or at least most of it. This is a fund your landlord will dip into to fix any damage incurred during your residence. If you happen to put a hole in the wall, and it costs $100 to fix, your security deposit of $300 will be returned to you at $200.

A lease needs to be reasonable (quiet hours shouldn't have to start at 3 p.m., for example), and a good, professional landlord will be open to compromise. Read over your lease carefully, and don't let a landlord or leasing agent rush you. If you don't understand something on your lease and need it clarified in writing, ask to have that section changed. If you disagree with something, ask for the landlord to work with you. Make sure that any changes are initialed and dated by both the tenant and the landlord, because once you sign it at the end, you accept the terms of everything in the lease.

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A lease lists everyone who lives in the apartment, and all tenants must sign on the dotted line, but the agreement doesn't account for internal roommate matters. Leasing time is a great opportunity to draw up a roommate contract to decide how bills, chores and maintenance are to be split. And make sure you include everyone living there -- if you sneak in someone after the lease has been signed, you could be evicted (and/or lose your deposit).

What about pets, pet fees and pet rules in an apartment? Read on.

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If you own a pet, ask your landlord if it's all right to have one in the apartment.
If you own a pet, ask your landlord if it's all right to have one in the apartment.
Andrei Spirache/Photographer's Choice RF/Getty Images

Do you own a dog, a cat or something more exotic and caged, like a parrot or iguana? That's fine, and it's probably fine with your landlord, but it's something that will have to be agreed upon with very specific terms. Some apartments don't allow any pets at all, or they allow caged pets, cats instead of dogs (as cats usually aren't as destructive as dogs), or cats and dogs under a certain size. Ask your landlord before you move in for the details on pets in your apartment -- it's easier to find a place that will let you bring your pet than trying to renegotiate your lease after you've already moved in.

If you're allowed to have an animal, you'll most likely be charged some kind of fee or deposit for the right. This could be either a move-out cleaning fee or a "pet deposit" charge, similar to the security deposit, from which any post-residential pet damage costs will be deducted. Another option is that the pet deposit fee is completely non-returnable.

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Pet rules may be subject to negotiation. Say, for example, the landlord has a 30-pound (13.6-kilogram) weight limit on pets, and your dog weights 35 pounds (15.9 kilograms). That just means they don't want large, potentially messy dogs -- you can probably compromise on that. And if you plan to get a pet later on, tell your landlord, as you may need to pay a fee upon move-in or renegotiate the lease upon the animal's arrival.

If there isn't anything in the lease agreement laying out pet rules or possible fees, ask your landlord, and get any important information in writing. Whatever you do, don't try to sneak in a pet without telling your landlord. Sure, you'll avoid paying the deposit, but if you get caught, that's a violation of the lease terms (as you claimed on the lease to not keep pets) which could lead to eviction.

What if you need to move out, but your lease isn't up yet? It's not the end of the world.

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A lease is term-specific, usually lasting one year. That means that you have agreed to live in the apartment for that period of time. If you need to move away for any reason, you may be held to the terms of your lease. A landlord can make you buy out your lease, for example. Let's say you have four months left on your lease, and you pay $1,000 in monthly rent. The landlord would then let you out if you paid the $4,000. Some leases have a "buyout clause," with a fixed, but likely high number, to void the lease. Landlords have also been known to let tenants out of a lease by holding onto the security deposit. In any event, check your lease agreement when you move in, so you know what you'd be facing if the time ever comes.

If the terms of the lease are violated, it often renders the lease invalid, allowing you to move out. A common version of this scenario is if a landlord repeatedly fails to make the repairs of the sort promised in the lease. Provided you can show a written record of repeated requests, followed by a reasonable amount of time for the landlord to make the repairs, you may be off the hook. Or if the city denies power or water to the complex due to the fault of the landlord, that's another case of failed promises.

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If that lease is airtight, and neither party did anything wrong, you may be able to sub-lease the apartment to a new tenant. (Some states, however, don't allow this.)

A lease can also be terminated if the tenant fails to hold up his end of the agreement. To avoid that situation, pay your rent on time, and always keep things clean and civil.

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Related Articles

Sources

  • ApartmentLiving.com. Questions to Ask Before You Sign a Lease." Jan. 12, 2007. (Aug. 7, 2012) http://living.apartments.com/landlords-leases/signing-an-apartment-lease-questions/
  • Aragon, Christine. "9 Things You Should Know Before Signing a Lease." TheNest.com. June 20, 2011. (Aug. 7, 2012) http://ideas.thenest.com/real-estate/renting/articles/signing-a-lease.aspx
  • Burt, Erin. "Guide to Apartment Dwelling." Kiplinger.com. Sept. 18, 2008. (Aug. 7, 2012) http://www.kiplinger.com/columns/starting/archive/2008/st0917.htm
  • Campbell, Richard. "The Tenant's Handbook: What You Need to Know Before Renting Out Your First Apartment or House." Minute Help Press. 2011.
  • KMSPublishing.com "Before You Rent: Your Ultimate Guide on Rental Advice For House Renting and Apartment Renting." CreateSpace. 2010.
  • Pendola, Rocco. "What Is An Apartment Lease?" SFGate.com. 2012. (Aug. 7, 2012) http://homeguides.sfgate.com/apartment-lease-1745.html

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