General Real Estate

The Importance of a Rental Lease Agreement

The most important aspect of renting an apartment or home is signing a rental lease agreement, so it’s imperative that you know exactly what you’re signing. Despite its importance though, it’s ironic how often this binding legal document is quickly sketched over and not given the attention it deserves. A lease agreement sets out all the terms that must be adhered to by both the landlord and the tenant, and should not be taken lightly.

The Importance of a Rental Lease Agreement

If you’re new to the renting world, the legalities and terms of a lease agreement are no doubt somewhat daunting. Perhaps the landlord is standing over you and you’re feeling rushed, or maybe you’re embarrassed to ask a question, but this document will stipulate all the important elements of your rental so you must know what it says, and understand it. It is better to read the contract with the landlord present because that way you can ask questions, and any diligent landlord will be happy to answer them.

Most agreements will follow a fairly standard format in the details they include, so you need to look out for the following important points.

The Lease Term

The lease term refers to the amount of time you are agreeing to remain a tenant in the apartment. Obviously you want to be sure that the term will work for you; there’s no point in signing a 2 year term if you know you want to move out in 6 months time. Personal circumstances can change though, and you may find yourself having to move out earlier than you had planned. If this happens, what does the lease agreement stipulate about any penalties and do you think you will be comfortable with them?

Security Deposit

A security deposit may also be referred to as a damage deposit and it’s an agreed sum of money that the landlord has from the tenant on commencement of the lease. Most landlords will ask for some kind of deposit, and as the tenant you need to be clear on when the money will be returned to you, and under what circumstances. Some landlords will only return a full deposit once the apartment has been inspected and is free of damage, or has been cleaned satisfactorily.’

Utilities

Utilities can add a huge chunk to your monthly rent so this may have been a question you asked the landlord from the get-go. Many landlords do include at least some of the utilities in with the rent, or you may get cable included if you’re in a condo complex. Whatever the case, which utilities are included and not included need to be clearly stated on the lease agreement, and if one is not specifically listed this would indicate it is not included and will be the tenant’s responsibility.

Repairs and Maintenance

Obviously if a light bulb needs replacing the tenant would do this, but what happens with more major repairs and maintenance issues? You would expect that most landlords are responsible for repairs to things like plumbing, heat, and air conditioning, but what is the process? Would the tenant be expected to arrange and pay for the repairs themselves and then request the money back from the landlord, or will the landlord take care of it? The lease should also specify timeframes i.e. the landlord agrees to repair y within x days.

Event Notification

During the course of renting an apartment or home you may go on vacation, or you may have someone come and stay with you for an extended period of time. These are events that may be stipulated in the lease agreement as things the landlord needs to be informed of. For example, if you’re leaving the home unattended while on vacation the landlord should be told as this could affect his insurance if something happens to the property. Equally, the well being of the property is in the landlord’s best interests, so he or she may specify that they wish to be informed immediately of a leaking dishwasher or other such plumbing, as these things left untouched can cause a lot of damage. By reading the lease agreement carefully you will know in advance what is expected of you as a tenant.

Rent Increases

On shorter term leases a tenant would not expect the monthly rent to be increased, but if you’re renting for more than a year a rent increase is a possibility. The lease agreement should specify by how much (usually indicated as a percentage increase) the rent will rise.

When it comes to pets and lease agreements this can be quite a gray area that’s open to speculation. The agreement should specify what type of pets and how many are allowed, and may also have conditions on size and breed. If you don’t have pets yourself you should still read this section carefully as it could mean there are numerous apartments around you that do have cats or dogs living in them. Will this be a problem for you in terms of noise, smell or allergies?

Moving Out and Lease Termination

What happens once the initial lease term is coming to an end? Will you have the option to extend it, or to stay longer once it has ended the lease agreement needs to specify this. Also moving out terms should be specified, such as how much advance notice is required by your landlord, and what will happen if you have to move out before the lease expires.

Guest Article: Canadian Renters

More tips and advice on renting an apartment or home in North America can be found on Canadian Renters; a website specializing in apartments for rent across Canada.

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