Posted February 6, 2018 01:13 pm

How To Understand Essential Lease Terms

Whether it’s your first foray out of mom and dad’s house, or just another in a long line of pads, getting a new apartment is always an exciting event. It’s not all fun and games, though - and I’m not just talking about the physical pain of hauling that hand-me-down Craigslist couch up three flights of stairs. Renting an apartment carries with it a great deal of responsibility and legal commitment that you would do well to research thoroughly before signing a lease – you may even want to seek the advice of a lawyer.

Read Your Lease!

Although you may not think of it in these terms, your lease is actually a contract with legally binding effect. When signing your lease, you agree to a particular set of legal benefits and burdens, sounding in both contract and landlord-tenant law. This means that, despite the fact that it is a painfully dry, and often boilerplate, legal document, you MUST read and understand the terms of your lease. This is often where a lawyer might be helpful, since they will be able to make sense of any confusing provisions or legalese and give you a clear idea of what your lease terms actually mean. Having an attorney look over your lease will not only help you ensure that you understand what you’re getting into before you sign, it may also save you from falling for a scam.

Important Terms to Look For

In addition to the important yet basic terms you should be able to understand yourself, such as when rent is due and rules you have to follow as a tenant, some of the most important lease terms you need to understand are: the duration and renewal process of your lease, which party is responsible for the payment of particular utilities, what uses of the property are permitted, whether the tenant may sublet all or a portion of the property, and who bears the burden of repairs to the property.

Duration and Renewal

First, let’s discuss the duration and renewal process. There are many different types of tenancy, but the most typical are leases for a set period of time, typically one year in residential leases and usually a few years per term in commercial leases. It is also possible to have a lease that lasts month to month, or even leases that can be terminated by landlord or tenant at any time without notice, but these are more rare. It is important to know which type of duration is created under your lease, so that you know how long of a commitment you are making.

Closely related to the concept of lease duration is the process of renewal. For example, a periodic tenancy, which covers most month-to-month leases, usually renews automatically until one party gives sufficiently advance notice of termination. A tenancy for a fixed term, on the other hand, often terminates upon the expiration of the term, unless the parties agree to a renewal prior to expiration. This is a crucial concept to understand, because failing to take the appropriate action to renew or terminate your lease could end up with you stuck in a lease longer than you intended, or out on the curb sooner than you were planning!

Splitting the Check: Who Pays for Utilities?

While having an apartment is nice in and of itself, it’s a whole lot more enjoyable if that apartment has heating and cooling, running water, electricity, and waste removal. Obviously, someone needs to pay for these services, and your lease will tell you exactly who is responsible for each one. You and your prospective landlord are free to negotiate over who pays for which utilities but, because most residential lease are prepared by landlords, tenants are usually responsible for most of them. If you actually review your lease before signing, you will notice if it has you on the hook for all of the utilities, and you will have a chance to try and talk to your landlord about altering the arrangement.

What’s the Use?

The manner in which you use your property must not only conform to local zoning ordinances, but must also abide by any use restrictions in your lease. Landlords have much more authority to restrict tenant use in the context of commercial leases, but some reasonable restrictions are permitted in the residential realm, too. If there are some questionable restrictions in your residential lease, you may want to consult with a lawyer to determine if the restriction is violating your rights as a tenant.

An example of a reasonable use restriction that may be upheld in a residential lease is a restriction on subletting. This concept has a very particular legal meaning, but in short a sublet means that you remain the tenant under the lease, but allow another person to live in your apartment with, or instead of, you. This can upset landlords for obvious reasons, since they went through the process of selecting you as a trustworthy tenant and don’t want you to simply turn around and let a stranger live in their property. Consequently, many residential leases prohibit subletting, or at least require permission from the landlord beforehand.

Make sure you check your lease for restrictions on subletting before you do it (this includes accepting guests from Airbnb!), because an unauthorized sublet will be treated as a breach and could result in your landlord terminating your lease and evicting you.

Fixer-Upper

Let’s end our discussion with one of the most important items in a residential lease: who is responsible for repairs to the property? A typical lease will require a tenant to maintain an apartment in as good a condition as it was when they moved in, excepting general wear and tear. Landlords, on the other hand, are responsible for big repairs that do not arise from the tenant’s wrongdoing, such as replacing broken hot water heaters or putting on a new roof when necessary. Gray areas, such as a tenant’s rights when a landlord fails to repair significant damage, or the parties’ rights when the tenant is the cause of the damage, are usually covered in the lease. Be sure you know what your lease says about repairs long before any are necessary!

Conclusion:

Although this is not a comprehensive list of important lease terms, it does give you a good sampling of some of the most important provisions. The main takeaway of this article, however, is to drive home the idea that a lease is a contract full of important and difficult to decipher legal terms. As such, you must very carefully review it and understand its terms before signing, and it is highly recommended that you seek the opinion and advice of a lawyer during the process, as well.