You're moving to a new city, and you're excited about a new apartment and new experiences. With a lot of options for housing, the processes are often different and overwhelming, but a few things always stay the same. Read the fine print before you sign the dotted line on a new lease for your new rental property...but wait, do you even need a lease? Yes, you do. And here's why.
What is a lease?
A lease is a formal binding contract between a landlord or property management company and a tenant (AKA renter). A lease outlines expectations for both renters and hosts during a specified duration in a specified location. Leases protect both renters and hosts. A lease outlines a variety of rules and policies regarding the space you'll be living in and helps determine what the relationship between you and your host should look like.
Some points covered in a lease agreement include:
- Rental payment due dates, prorating policies, and procedures regarding grace periods for late rental payments
- Pet agreements, including pet deposits
- Security deposit amount
- The amount required to secure the rental, which is usually a combination of a security deposit, first month's rent, and/or last month's rent
- Fees: Cleaning fees, late fees, background check charges, credit history checks, and application fees
- Lease term: Move-in and move-out dates
- Policies regarding subletting and overnight guests
To be valid, a lease agreement must be signed by both parties, signifying that both agree to the terms and conditions outlined in the lease.
Do I need an official lease?
Yes. My dad always said, "Good fences make for good neighbors." This is a small-town country way to say "you need to cover your ASSets." Get everything in writing, and plan for the unexpected. You might think to yourself, "I'm just staying in this space for a short time; I don't need a lease." But you do. Something that doesn't seem like a big deal right now could be a focus of disagreement in the future, and it's best to have all bases covered. A good example of covering your bases: understanding and agreeing on what the security deposit covers. As a renter, you pay a security deposit and have expectations of getting it back--a lease will outline what you can expect back, what is non-refundable, and what you'll need to do as a renter to ensure a maximum return.
Can it be a verbal agreement?
Verbal agreements can be considered binding for up to a year, but...
- They can be very hard to prove.
- The outcomes are usually less than favorable for both parties.
Written documents provide clarity for both renters and hosts about the details of a stay, including all associated fees, the cost for utilities, and expectations around the maintenance of the space.
Can I just rely on the marketplace agreement? I booked through this site, so I'm covered, right?
No. A marketplace's role is to connect renters with hosts, but since the marketplace doesn't own or rent properties, they do not have a say.
An agreement to rent must be between the renter and the host and if you're staying in a space longer than 30 days, it's important that your tenant's rights are observed. When a host lists their space on a marketplace site, they can show information including but not limited to: a description of the property, fees associated with monthly rental payments, and photos of the space. Marketplaces have terms and conditions that are limited to activity on the sites themselves but not beyond. Because of this, a reservation through a marketplace is not sufficient to replace a property lease agreement. How often can a host enter your rented space? Under what conditions? Do they have to give you notice? The lease agreement is where those details are outlined and you can ensure that your rights as a tenant are being observed.
The Lease Signing Process
When should a lease be signed?
Your host should send the rental lease to you no later than 6 weeks before your move-in date or as soon as possible after you commit to moving into their property. This gives you a chance to thoroughly read the lease, ask questions, and if necessary, try to find another place if you don't want to agree to the lease terms. This also allows you to get clarity about what you're signing and why.
Do I actually need to read it before signing?
Yes, you should read each part of the rental lease to completely understand the binding contract you're about to sign. I know, you usually get the updated Terms and Conditions from Google and you immediately click "I agree." While that's also bad to do, this is not the document to sign without reading.
Areas to focus on while reading the lease:
- Amount of monthly rent
- Does the host prorate the first and last month's rent, or are you expected to pay the full month's rent?
- Lease term: Are the move-in and move-out dates correct?
- Address of property
- Security deposit amount and what it includes
- What can or will be taken from the security deposit upon move-out?
- Is it completely refundable or partially refundable?
- Requirements of renter's insurance and evidence of a policy
- Rules for overnight guests and parties
- Under what circumstance the host can enter your rental
- How the host handles any failure to deliver on disclosed amenities
- Expectations of you at move-out
- Most hosts expect their rental units to receive a "broom swept" cleaning, but others have more specific move-out procedures and fees for left items. Make sure you understand what's expected of you.
- Situations or behaviors that are grounds for eviction in the eyes of your host
Am I allowed to ask questions?
Absolutely. Ask questions about any and everything included — or what you think should be included — in a lease agreement. We recommend that you ask the host to clarify parts of the lease and seek advice from a neutral party to gain the most perspective and understanding.
Once you feel comfortable, sign the lease
Once you asked all your questions, received satisfactory answers, and feel comfortable proceeding, sign the lease and make a copy of the lease (after you signed it) before returning the lease to the owner. The host also needs to sign the lease and then remit a copy of the final signed lease to you, the renter. Once signed by all parties, both renter and host are bound to the lease agreement for the duration outlined in the document.
Most new tenants find that their rental experiences are smooth-sailing, but creating a lease agreement that all parties can agree to ensures peace of mind for all everyone involved and lowers the potential for unhappy renters or hosts.