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What To Look Out For In Lease Agreements

If your lease has an option to extend one or more years, check that there is an escalation clause that would increase the rent in subsequent years and is usually based on a fixed dollar amount, a percentage of the first year`s rent or increases in the cost of living. Many tenants don`t bother reading the lease before signing it. That`s a big mistake. Depending on the city or the state, some leases may have an automatic renewal clause that is enforceable. This clause essentially stipulates that the lease is automatically renewed when the current lease ends. For example, when a payment is delayed, and what type of fee will come into effect as a result of a late payment? Is it a monthly lease? If so, what is the premium to such an agreement? So read the lease before you sign, as boring as it is. While you`re at it, here are 6 things you should be careful about if you sign a lease. “People are sometimes in a hurry and mistakes are made,” says Malin. You should also check the rental for an interruption clause. Landlords are forced to make a reasonable effort to re-rent your home if you have to leave in the middle of your lease, but there is a risk that you will be on the hook for the rest of the life if another tenant does not take place. It is important that this is stipulated in the lease, because if you do not, you may not be entitled to a rent reduction if the place becomes unusable for any reason. The repurchase agreement may also have a buy-back clause. For example, Elizabeth Colegrove of The Reluctant Landlord offers the example that either the tenant or the landlord can break the lease without penalty as long as they have provided 60 days` notice and a two-month lease fee.

Hakim points out: “Owners must notify tenants in advance of rent increases of more than 5 per cent or if they do not intend to renew the lease.” We know that leases can be difficult to navigate, especially if they are filled with legalese, special clauses and you just want it to be signed, so you can move in ASAP. However, it is important that you do not rush and know what you are getting into, so we have a checklist of important things that you should be careful about when you receive your lease. If you sign without exceeding strange or apparently unfair clauses, you must live with them for the duration of the lease. What for? Because a signed lease is a binding contract. The exception is when the terms of the lease violate state law. In Georgia and California, for example, it is illegal for an owner to include a rental clause that removes his right to a jury in the event of a dispute with your landlord. Here you can consult your government laws. Not everyone likes animals, and having a dog or cat can be a potential obstacle, especially if you plan to have one after moving in. If this is the case, make sure that the rental agreement expressly recognizes it, so that the landlord does not agree if you decide to bring your new best friend home. While you probably know that leases are legally binding contracts, they are sometimes much more restrictive than tenants recognize. For example, a tenant may be frustrated to discover that it is difficult or expensive to get out of a lease.