Easy Millennial Guide To Lease Agreements

Posted by: TheGuarantors on July 28, 2021

At some point in your life, you'll probably rent a home if you haven't already, and you'll find yourself looking at a lease agreement with a lot of legal jargon. You'll probably give a slightly confused glance and sign it. As a potential renter, it's important to understand what each term and clause in a lease agreement mean. Learning different components of a lease agreement can empower and protect you if a legal dispute arises.

A lease agreement, known as a lease, is a legal contract between a landlord and a tenant. The term "lease" and "rental agreement" are often used interchangeably. However, they have different rules and durations.

A lease is a long-term agreement, which usually lasts a year and can be renewed. A rental agreement is a monthly agreement, and it's ideal for short-term tenancy. Let's take a look at the different elements of lease agreements.

Elements of A Lease Agreement

Animated gif of Rocko signing a contract

Property Details

The lease agreement must include basic details of the property. This should consist of the landlord's name, tenants' names, contact info for each, and the property address. The lease must also describe if the house is furnished and give details of all the appliances and furnishings available.

Lease Term

A lease agreement always specifies a beginning and end date for it to be effective. Between this period, the landlord cannot give you the notice to vacate. The tenant must leave the property on the end date of the lease unless they get their lease renewed. A leasing term usually lasts a year, but it can go on up to 100 years!

Rent, Deposit, and Other Fees

Your lease agreement will include details of the monthly rent price. Apart from the rent, it should have security deposit information, which will vary based on the laws of your state. Your landlord should provide details of the total security deposit, the bank account in which the deposit will be kept, and any interest that will be earned on it.

Apart from rent and deposits, landlords can also charge money for amenities like parking and late rent fees.

Subletting

Landlords must also include a subletting clause that allows or prohibits tenants from renting the space to others. The lease may set limits or ban subletting altogether.

However, if you break a lease early, subletting can save you money. Ask your landlord if subletting can be considered in such a scenario.

Utilities

Utilities include electricity, gas, water, sewer services, cable services, and internet.

The lease agreement must include a list of utilities included in your monthly rent and which, if any, you have to pay for separately.

Maintenance

You must read the lease to know exactly what is your landlord's responsibility versus what is your responsibility. This is particularly important because some landlords are responsible for taking care of all repairs and maintenance of the property. Whereas some landlords will only replace important appliances, and the tenant is responsible for everything else.

Some leases may leave tenants entirely responsible for handling all maintenance and repair costs and being clear about who pays for what can save unnecessary disputes

Pet Policies

Your lease must indicate if one or more pets are allowed on the property, along with a document showing a deposit for covering pet-related damages.

The landlord may have the right to evict you if a lease prohibits you from bringing animals into the property and that is violated.

Property Inspection

Make sure your lease has a section indicating the property has been inspected by you and the landlord. Details of appliances that need repair and maintenance must be documented and mentioned on the lease.

Rules of The House

These are a set of rules and expectations the landlord has from a tenant before they move in. They include rules like:

  • Maximum occupancy
  • Guest rules
  • Parking and storage
  • Quiet hours
  • Right of entry for the landlord
  • Smoking
  • Alterations to property
  • Renters insurance and other insurance requirements
  • Set of eviction rules

Cost of Breaking a Lease

It's important to know what penalties you'll incur if you have to break the lease. The lease agreement should include the penalty amount along with any other necessary details for evacuating the property before your lease is up.

gif of Homer Simpson holding up a contract

Reading and understanding your lease can give you an idea of what you're getting into. Always ask your landlord if you need clarifications on specific clauses. If you have the money, you can always contact an attorney to review the lease agreement and sign it.