Apartment Lease Basics

What you need to know about this key document

couple signing lease agreement
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When you rent an apartment, you and your landlord will probably sign a lease, a document that gives you the right to occupy your new home for as long as the lease remains in effect.

Before you sign a lease, you might wonder what the best lease term is, how much you'll owe, who else might need to sign the lease, and even whether you'd be better off renting your apartment without a lease at all.

After you sign a lease, you may decide you need to move out early and worry that breaking your lease may incur penalties. Or, you might take issue with a certain rule in your lease and need to persuade your landlord that the rule is unfair or that it shouldn't apply to you.

Fortunately, you can be prepared and avoid many problems by reading up on the basics of apartment leases below.

Fixed-Term Lease Versus Month-To-Month Rental Agreement

Most of the time, landlords and tenants agree to a fixed term, such as a year, for a tenancy. When the time is up, both parties can agree to renew the lease for another fixed term. Find out why a longer lease term may, or may not, be advantageous to you.

By contrast, a month-to-month rental agreement automatically renews unless the landlord or tenant decides to end it. Although this appears to offer greater flexibility, it may come at a price. 

What You Owe at Lease Signing

Be prepared to pay around two to four times your monthly rent, if not more, along with signing your lease. From paying some rent upfront, plus a security deposit, broker's fee, moving fees, and more, you'll certainly need to bring your wallet to your lease signing. Here are more details about what you should expect to pay at lease signing.

Lease Guarantors 

If you're concerned that landlords won't sign a lease with you because they'll think you don't earn enough income, you may be able to have a relative or friend help out by signing the lease as a guarantor.

If you find your dream apartment but the landlord is hesitant to rent it to you after a financial background check, you can ask about this option.

Unfair Lease Rules

Often enough, tenants believe that a certain lease requirement is unfair. If you feel this way, you may very well be justified in not following the requirement. As an apartment tenant, keep in mind that a rule violation can put you at risk of losing your home, so it's important to be able to articulate the reason why you believe logic and the law are on your side when it comes to the validity of an apartment rule.

Breaking Your Lease

Tenants often have good reasons for wanting to end their lease early. For example, one common reason is when a tenant decides she wants to own a home.

If you must break your lease, find out how you can avoid or at least limit a penalty from your landlord.