Negotiating Commercial Leases & Renewals For Dummies
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When you rent an apartment, you'll sign a rental agreement (lease agreement) — a legal document stating your responsibilities as a renter.

An apartment rental agreement can be short and simple if the landlord owns very few units, or it can be five to ten pages full of complicated language if the landlord owns many apartments. In either case, the lease agreement covers several important items in addition to the actual amount of rent you'll be paying and when that payment is due. Keep all of this in mind as you decide whether or not to rent the apartment.

For Rent sign on window © Erik Mclean / Unsplash.com

Length of term

The shorter the term of your stay in the apartment (say one year), the more freedom you have when it comes to renewing your lease or moving out. Conversely, a longer term usually allows you to lock in a particular rent (no price increase!), even if there's a clause that causes it to escalate in subsequent years. If you leave before the end of the term, you'll lose your security deposit; and if the landlord wants to sue you, you'll have to pay all the rent over the course of the term, whether you're living there or not.

Deposit

Almost all landlords insist on a security deposit, both to protect themselves if you fail to pay the rent and to use to repair any damage you may have done to the apartment. If you return the apartment in good shape, you'll get the deposit back when you move out. If repairs are needed, they'll be deducted.

For your first payment, your landlord may ask for more than what you've agreed on for one month's rent. One reason many landlords ask for two months deposit is to keep their tenants from not paying the last month and there being no money left to draw on to make repairs. In most states, the landlord is required to pay the tenant interest on the deposit.

If you're aware of a problem, like a leak, and fail to report it to the landlord in a timely manner, the agreement may state that you're liable for any damage, so be sure to let your landlord know about a problem as soon as possible, even if your landlord is slow to make repairs.

Utilities

In some apartments the tenant must pay for every utility (water, gas, electricity, garbage collection, heat, and so on), while in other apartments some utilities may be included in the rent. You might even see text about agreeing not to waste utilities that the landlord provides. Make sure to ask your landlord if any utilities are partially or completely covered in your agreement.

Subleasing

Landlords want to know who their renters are so they protect themselves from having their tenants let someone else live in the apartment, be that while you're living there (including a significant other or family member not named on the lease) or, mostly, if you were to leave the apartment for a time and want to let someone else stay there and pay the rent. Doing that is called subleasing your apartment.

Your lease may have a clause that doesn't permit you to sublease, but if you speak to your landlord, and if the person you want to sublease to has good referrals, you might be given permission. Just remember, you'll still be responsible for late rent, damage, or other costs incurred by the people you've subleased to. And if you sublease illegally, you'll have broken the terms of the agreement and the landlord can take you to court and throw you out.

Late fees, insurance, improvements, pets, and more

Your rental agreement may state the amount of late fees that can be applied if you don't pay your rent on time, forbid you from having a pet, or make you buy renter's insurance. You might see other terms on the lease agreement that:
  • Spell out what being a good tenant means, in terms of noise, and so on

  • Make you ask for permission before making any alterations to the apartment and/or make you pay to restore the apartment to the way it was before leaving if you do, even if you think you improved the place

  • Allow the landlord access to the apartment to make repairs, inspections, or to show the apartment once you give notice that you're leaving. The landlord, however, will have to give you reasonable notice before entering your place — unless there's an emergency, such as a broken water pipe.

  • Prevent you from conducting a business on the premises

  • Specify furnishing and/or appliances that are included if the apartment comes furnished

  • List when you're allowed to move in and out (particularly if there's a service elevator that must be reserved)

  • Say the landlord is responsible for painting, and state how often painting will occur

Going to court

Most rental agreements specify the conditions if you and the landlord have a legal dispute, including which court (which may be limited to arbitration) and under what circumstances you might have to pay the landlord's legal fees.

About This Article

This article is from the book:

About the book authors:

Dale Willerton is the founder of The Lease Coach. Until the mid-1990s, Willerton worked for commercial landlords but came to realize it wasn't landlords who needed his help; it was business tenants. Since then, The Lease Coach has become a leading authority on commerical lease negotiation for retail, professional, franchise, and office tenants. Learn more at theleasecoach.com.

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