Leases: What to Know
Things to Know About Leases
The Language of Leases and Rental Agreements
Leases, or rental agreements, use formal, legal language, defined below:
Premises: the property that you are renting may be described as ‘the premises’ in the document, this simply means the space you are renting.
Term: The length of your lease is referred to as the ‘term’ this means how long you are legally allowed to occupy the rented space, and how long you will be accountable for paying rent to do so.
Clause: this refers to the different sections of a legal document, a lease agreement will consist of a number of clauses addressing different aspects of the agreement, such as a break-lease clause, to address the policy around ending your tenancy, a repair clause, to outline the tenant and landlord’s responsibilities regarding maintenance, and so on.
Landlord: The landlord is the party from whom you will be renting, this is the property owner. There may also be a property manager, who functions as the boots-on-the-ground presence, or representative, for the landlord. The landlord may be an individual or a company, in either case you will direct your rent to the landlord, and if you are using checks to pay your rent you will write their name or that of the company on the check.
Tenant: In your role as the lease-holder, you will be referred to as the tenant, meaning the temporary, paying occupant of the space, for a limited amount of time.
Lease-Holder: as a tenant of the apartment unit, you will be the lease-holder, meaning that you have a document between yourself and the landlord stating your right to temporarily occupy the property.
Notice: This is the warning that the lease holder must give the landlord 30 to 60 days before you intend either to break the lease, or simply not to renew it at the term’s end. Likewise, a landlord must also give a tenant 30 to 60 days notice if it will be necessary for the tenant to vacate the premises or for the lease not to be renewed.
The landlord must also give notice before entering your unit, meaning that if they want to inspect the unit, or do repairs, they will need to let you know ahead of time. The particular amount of time will be described in your lease, but would likely be 24 hours.
Rent: this is the amount of money due each month to enable a tenant to maintain their lease of the property.
Property Manager: in your new apartment, and in legal proceedings such as lease signing and rent payment, you may find yourself dealing with a property manager, this is the landlord’s representative responsible for managing the building and dealing with practical matters. A property manager is often used by landlords who own multiple properties or large buildings. This will be your contact if you have questions and concerns related to your tenancy.
Lease Interval:This refers to the term, or length of the lase. There are a number of standard terms, 6 months, one year, and five years, but there are any number of other lease intervals possible beyond these.
Lease extension: a lease extension may also be called a holdover. When the term of the initial lease is concluded, it may be possible to ask for a lease extension, or holdover, form your landlord, which will extend your original lease on a month-by-month basis. This is helpful when your next lease or job starts somewhat after the end of your lease.
Elements of Lease Agreement
Break Lease Clause: This is the section of your lease in which the rules related to breaking your lease are outlined. It will be important to read this thoroughly if you are considering doing so, as the details may be specific to your lease. There may be a financial penalty for breaking your lease, or there may be what is called a buyout clause.
This clause states that either the landlord or the tenant, whoever is breaking the lease, must provide 60 days notice, and must pay 2 months break lease fee, meaning two months of rent after the lease is broken.
Financial penalty: The cost of the financial penalty for breaking your lease will vary based on the cost of your rent.
Possible Reasons for Breaking a Lease:
There are many reasons why you may need to break a lease, such as…
The living arrangement has become untenable because the conditions of the building or the logistics such as commute time do not work for you or meet your needs.
you have gotten a job which requires your to move
Your income has changed unexpectedly and you need to cut expenses. → your health has changed and requires different living arrangements
Buyout clause: A buyout clause is an alternative to a break lease clause in a rental agreement, this allows either the landlord or the tenant to break the lease, with 60 days notice, while paying two months of fees.
Property Maintenance Clause: This describes what your responsibilities and what the landlord’s responsibilities are for maintaining the conditions of the unit, this will vary and will give you directions for what to do when maintenance issues come up.
Automatic Lease Renewal: This is a clause which you can potentially add to your lease agreement if you are interested in having a longer tenancy. This clause would mean that the landlord was legally obligated to renew your lease at the end of the initial term, for the same interval. This would keep the landlord from showing the property to others or returning it to the rental market.
Negotiating a Lease:
If there are things that you want to address in your lease, then you and your landlord can negotiate adding and subtracting clauses, such as:
Automatic Lease Renewal: this is where you can choose to add or subtract this clause depending on your intentions
Lease Interval: this is where you can negotiate how long your term of lease will be, whether month by month, six months, five years, and so on.
Subletting: this is where you can address whether or not the landlord will allow legal sublets
Alterations to the Apartment: this is where you could address how you would approach alterations to the apartment, such as in the case of having a disabled resident who needs handles and other accessibility tools added to the space.
→ and many more.
Changing a Lease: If either the tenant or the landlord wishes to change the lease, they must give notice. If a landlord decides to change the terms of your lease, they must give 30 days notice before enforcing the new terms. If the tenant wishes to change the agreement, a new lease must be signed by both tenant and landlord.
Rent Increases: You can negotiate the amount of percentage by which your rent will increase when your initial lease ends and you have the option to renew it, this can be a good way of keeping your rent from increasing as quickly as units on the general market.
