Serious husband and wife reading bank documents at home.

Understanding Rental and Lease Agreements

When we finally decide to find a place of our own, we’re often excited about the opportunities created by a new home. Shopping for furniture, deciding where to put your favorite art and nick-knacks, and exploring new restaurants and stores are all part of the thrill when looking for a new place to live. However, one aspect of your new home is typically considered at best a nuisance and at worst a source of extreme anxiety and stress — your lease or rental agreement. But don’t let this packet of papers scare you and certainly don’t just turn to the last page to sign it… There’s important information in there that you’ll want to know about before moving into your new place.

The first thing to understand is what you’re signing. Terms can be used interchangeably at times, but it’s important to know the legal meanings behind them. A rental agreement typically runs for a short period of time, such as one month, but is automatically renewed each month. Provisions in the agreement should include a mechanism for ending the agreement, such as the landlord or tenant submitting the request in writing to the other party. A rental agreement often makes it easier for the landlord to raise the rent, but may be advantageous for a family who anticipates having their housing needs change in the near future.

The other popular arrangement for renting a place to live is a lease agreement, which typically is written for longer periods such as six months to a year or longer, and can only be ended prematurely if the tenant does not follow the terms of the lease. These terms can be very strict though, from noise level concerns, occupancy levels, types of pets, yard upkeep, and more. New families entering a lease agreement need to really understand what these terms are to avoid a future problem or misunderstanding with your landlord.

Serious husband and wife reading bank documents at home.

Regardless of the type of agreement you pursue, there are some features common to all types of agreements that you should look for and understand.

1. Rental Amount, Due Dates, and Terms of Stay

One of the most important elements of your agreement is the amount of rent that you’ll be expected to pay, when rent is due and when it’s considered late, and how long you can stay without having to renew your agreement. Late fees associated with an overdue rent payment can be quite high and can negatively impact your credit score, so it’s very important to understand when rent is due and how it is to be paid.

2. Prohibited Conduct

The one area that most commonly trips renters up is the terms associated with prohibited conduct and poor behavior. Noise complaints top the list and can come from loud parties, late night music sessions, barking dogs and even crying babies. Some noise is to be expected, but be familiar with what your landlord expects with regards to conduct. If you are planning a party, let your neighbors know in advance and give them your number to call you directly if they have a concern about noise. Other prohibited conduct can range from poor upkeep of the exterior of your rental to illegal activities which can be grounds for immediate eviction.

3. Security Deposit and Other Fees

Security deposits are an amount of money due at signing that serves as a protection against property damage or failure to pay rent. Most states will limit the amount of money that can be collected but often range from 1-2 months rent in advance. After you vacate your rental, if no damage is found, no fees are left unpaid and the rent is up to date, you should expect to have your security deposit returned in 15-30 days depending on local law. But when reading your agreement, also make a note of any other fees that may be mentioned. These may include a late payment fee (which can accrue with interest), an application fee, pet cleaning fees, or fees associated with breaking other terms of the rental agreement. The one fee you should never pay is a fee just to view an apartment or rental home – it’s a popular scam to reach out to apartment hunters and have them wire money in advance, then never show up for the viewing appointment.

4. Occupancy Rules and Guests

Rental and lease agreements typically spell out very specifically who is allowed to stay on the property and for how long. All adults are usually required to sign the agreement, making them all legally responsible for its terms. Guests are almost always allowed, but their length of stay can be limited and they will still be expected to follow the other terms of the agreement such as noise levels and pets. If the landlord wants to allow subletting your rental, which is when you find another person to assume the responsibility of your agreement like if you’ll be away for the summer, the terms for that will also be specifically spelled out in writing.

5. Pets

Your rental or lease agreement will undoubtedly make mention if pets are allowed, and if so then provide detail on the number of pets, types of pets (certain reptiles and even specific dog breeds may not be allowed), weight limits on pets, and other terms and requirements. You can expect to pay a non-refundable pet fee regardless of the type of pet you bring, which is often collected in advance with the security deposit. You can also expect to be responsible for any damage your pets may do to the property and may face strict restrictions on pet noise. For example, if you have a dog that barks while you are at work, that may create a serious problem down the road.

6. Utilities

The decision of which utilities to include in a rental or lease agreement can dramatically impact your total housing costs. Some apartments will pay for your water or gas, rather than hassle with individual meters and connections. Electricity and internet connections may or may not also be covered. Utilities cost the average American family $180 a month, so it’s an important consideration when deciding if you can afford a specific rental property.

7. Maintenance and Repairs

Another big cost and hassle can be dealing with maintenance and repairs. Some landlords will want to handle all repairs themselves to maintain control over the property and ensure quality materials are used, while others will prefer that tenants keep up with certain elements. Read your agreement carefully to understand what your future obligations might be, and how to request a repair if warranted.

8. Landlord’s Access to the Property

The final element that almost all rental and lease agreements will include are terms providing the landlord with access to the property while you occupy it. This typically isn’t an intrusive or unreasonable request. The landlord has a significant financial interest in ensuring that the property is being maintained, and may have legitimate needs in the apartment, like fixing the plumbing or even checking for fire hazards. The agreement should spell out how access can be achieved and the amount of advanced warning required before the landlord visits.

While some states do allow oral rental agreements for occupancies of a year or less, it really is in your best interest to get things in writing. Verbal agreements might seem more friendly and informal, but they can easily lead to misunderstandings which can land you in court. There are several nice generic rental and lease agreements available online, or talk to your certified realtor for resources on how to build your own.

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Cassandra is a writer with a background in engineering, enjoying the rural life in the Virginian Appalachians. When not working, she enjoys writing fiction, running a blog, camping, working in the garden, and tending to her flock of chickens! In addition to writing, she has a passion for art and graphic design. Her interests include disaster preparedness, homesteading, landscaping, cooking with natural ingredients, history, and animal husbandry.

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