Apartment Leases: What You Should Know Before You Sign

Apartment Leases: What You Should Know Before You Sign | CashCourse: Your Real-Life Money Guide

A lease is a legal agreement between you and a landlord—typically the property owner (or company representing the owner) from whom you rent. Leases obligate you and your landlord to specific commitments. Some landlords may require your parent(s) or guardian(s) to co-sign the lease if you are under a certain age or do not have much credit history .

One of the most important obligation of your lease is the length of time it is in effect. When you sign a lease, you agree to rent the apartment for the specified period of time. This means that you must pay the rent on the apartment for the entire time stated in your lease. Apartment leases typically last for one year.

Your lease obligation applies whether you live in the apartment or not. If you choose to leave your rental unit before your lease is up, your landlord legally is entitled to the rent you owe for the time remaining on your lease.

Short-term lease: A short-term lease normally will state a fixed monthly rental rate for the entire duration of the lease. So, if you know you are planning to stay in the apartment or house only for the school year, it makes sense to get a short-term lease for the nine months you will be there.

Month-to-month lease: With a month-to-month lease, you agree to rent for a month at a time. Your rental price is subject to change at any time (as long as your landlord provides the appropriate notice to you as defined in your lease). Usually the lease renews automatically—unless it is canceled by you or by your landlord (typically with one month's notice required by either party). Students often opt for short-term leases. If you are unsure about how long you will occupy the rental unit, a month-to-month lease may be the best option for you.

Subleasing: If you sublease (sometimes called sublet) an apartment or house, you are renting a property under an original lease that someone else holds. You normally work out the arrangements with the original tenant rather than the landlord. If you are going to sublease, be sure to obtain written consent from the landlord allowing you to live in the apartment or house for the duration of your agreement with the original leaseholder. You may find good deals with a sublease. If you are looking for housing for the summer months only, or for a period when the original tenant will be gone for a few months (to study abroad perhaps), you may find that the original tenant is willing to pay a share of the rent in order to keep the lease and have a place to return to. It's worth asking!

No matter the type of lease, be very sure that you understand and can meet the terms of your rental agreement. If for some reason you want to end your lease early, carefully read your rental agreement to understand any penalties for breaking the lease. You may owe a part or all of your remaining rent for the year, owe a hefty fee, or lose your security deposit.

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