Signing leases is a part of life, whether it’s for your car, house or a mysterious multi-billionaire seeking a sexy contract. No matter the lease, it’s important to understand how they work.
The two main types of leases are short-term and long-term. Long-term leases are the most popular when it comes to apartment leasing because they provide stability for both the tenant and landlord. Long-term leases also have a lower monthly rent compared to short-term leases. Spencer Moore, a Nino Properties Realtor, said this is because the apartment owners lose money when short-term leases are signed.
“The single most important thing to do for somebody that is going to rent an apartment, that most people don’t do, is to read the lease before signing it,” said Richard Alderman, director at the Center for Consumer Law.
Although short-term leases may result in a higher monthly rent, they provide flexibility for the tenant. Circumstances can change a lot as a college student, so with a short-term lease it is less likely that you will end up having to break your lease.
“Let’s say in this imaginary world there is an apartment for $1000 in Midtown,” Moore said. “If you were to do a 12-month lease there it would be $1000, but if you were to do a 3-month lease it would probably be $1,800.”
Breaking a lease can be detrimental to your credit and rental history. It also could make renting in the future more difficult and expensive. If you anticipate that you may have to break a lease for things like a new job, then Alderman said you can ask your landlord to add a clause in the lease before signing it.
“It would say in the event that you are transferred ‘x’ number of miles away from your apartment, you can terminate the lease with a 30 or 60 day notice,” Alderman said.
A major part of every lease is the amount you are agreeing to pay monthly for rent. To make sure that you are getting a fair rate, Moore said students should stop by at least eight complexes that are within the same area and class.
“Class A is fancy with granite everything, Class B is less of, and Class C is even more less of,” Moore said.
The point of doing this is to be able to evenly compare rent prices to see if you are getting a fair price for your specific apartment.
People often find themselves in a position where they like an apartment, but cannot afford the rent. This is when negotiation comes into play, Alderman said.
“When the market is very good for landlords they don’t negotiate,” Alderman said, stressing that a potential buyer should always attempt negotiations. “When the market is not as good and there’s more competition, then they are more likely to negotiate.”
In addition to rent, another cost on the lease is the security deposit. The purpose of a security deposit is for the landlord to set money aside to cover any possible future damages that the tenant may cause. They can vary from as low as $100 to as much as the price of one month’s rent.
To make sure you don’t get charged for previous damages, it’s a good idea to walk through the apartment with your landlord and take pictures of everything before signing the lease. Within 30 days of moving out, the landlord must either return your security deposit or explain to you why it is being withheld or deducted.
“If you party a bunch and throw chocolate on the walls, you’re going to get a big chunk of your deposit taken out,” Moore said.
If you plan on having pets, there is also a pet deposit that you must pay in addition to the security deposit. Pet deposits typically end up costing a tenant around $250. After you make the pet deposit, there is often also a monthly pet rent that must be paid with your regular rent. Pet rent normally ranges from $10 to $25.
The costs of having a pet can quickly add up, so it’s vital to pay attention to the part of the lease that states the landlord’s guidelines on pets.
Roommates also split the responsibilities for the apartment, but they can sometimes cause a plethora of problems if not chosen properly. Alderman said that if your roommate doesn’t pay their share of the rent or moves out—even though you both signed the lease—you are responsible for paying the full rent to the landlord.
“If you don’t pay all of the rent, you will be evicted and it will be on your credit report,” Alderman said. “You really want to make sure your roommate is someone you know well and is financially responsible.”
Apartment leases involve various statements and as the tenant you are responsible for upholding everything that is above the dotted line.
“Understand that you are entering into a significant legal agreement, and the lease is binding the way it is written,” Alderman said. “There are a number of laws that help tenants and it is always important to know your legal rights.”