Leases 101: Understanding Your Lease

As a first time renter, you may not fully understand the dynamics of a lease, how signing one impacts you legally, your responsibilities as a lessee, and what landlords look for in a renter. For informational purposes only (we’re not lawyers, just very experienced real estate brokers!), here are 5 quick points that will help you better understand your apartment lease:

What Is A Lease?

In short, a lease is a contract. It is a contract between the person who will be renting the property, called the lessee, and the person who owns the property, the landlord. In this contract you agree to pay a specific amount of money, at specific periods during the contract, for continued use of the property. On a lease this payment period is usually monthly. Often, you are also agreeing to care for the property in specified ways. For example keeping it clean, maintaining the yard, or reporting when things need repair. As long as you honor the terms of the contract, ie. pay your rent on time and maintain the property, you will be allowed to use the property until your lease is ‘up’, meaning the contract ends.

As a renter, if you honor all the terms of your lease, often you will have the option of renew your lease. To ‘renew’ a lease can mean one of two things:

  1. You are extending the period of the current lease with the same terms, or
  2. You are signing a new lease for the same property with different terms. For example, your rent may go up or down based on the rental market at the time of the renewal, or the property may have new rules that you have to agree to.

The landlord determines which of these options are available to you. Depending on how happy you are with your options, you can choose to renew at the landlords terms, suggest new terms, or look for a new rental property.

If you do not honor the terms of your lease, the landlord has the right to evict you. Eviction is a process by where the landlord may legal, forcibly remove you and your belongings from the property.

If your landlord does not honor the terms of your lease, you have may have legal options that you can pursue against the landlord.

It is very important to actually read your lease and understand the terms you are agreeing to. You will be legally bound to abide by them.

Getting Approved: How Prospective Renters are Evaluated

Beyond being eligible to live in the United States, renters or lessees are typically evaluated based on 4 criteria. In the rental industry this process is called ‘qualification’ and these 4 areas are call ‘qualifying criteria’. Every apartment, rental or landlord has slightly different standards they accept in regards to qualifying criteria. Below we outline what is typically, but some landlords will be more lenient or more strict.
As standard procedure, Apartments Now apartment locators confirm your situation against the qualifying criteria of each apartment you are considering

Income

In order to verify your income, an apartment complex will typically will look for six months to a year of employment history. They also want to see that you earn three times the rent. If you're looking to spend $700 on an apartment, they want to see that you earn at least $2100 a month in gross monthly income, which is your pay before taxes are taken out. Typically a paystub is the standard form of income verification, but bank statements or a letter of employment and compensation from your company might be options.

Credit

Landlords will verify your credit using the typical credit agencies we outline on our credit page. Every landlord is different in terms of what their minimum credit score is, but in general:

  • 579 and Below
    Very Poor
  • 580 - 619
    Poor
  • 620 - 679
    Average
  • 680 - 719
    Good
  • 720 and Above
    Excellent
Rental History

Landlord are going to look through your rental history to be sure you don't owe a previous property any money. They also want to be sure there weren't any contractual problems, that you gave proper notice to move out, and that you paid your rent on time, etc. Some of this information can be gleaned from your credit report, but most lease applications will require you to disclose your previous addresses and they will likely contact those as well.

Public Record

Public Record - Apartments look at your public record to determine if you will be a threat to anyone else occupying the property or any of the neighbors. Most apartments will not lease you if you have a public record within the last 10 years, but some will work specific levels of public record. This article on on renting with a public record provides more information.

Renter Responsibilities

  1. Paying Your Rent In Full and On Time
  2. Caring for the property, keeping it clean and free of any additional damage
  3. Reporting problems to the landlord so that they can be repaired in a timely manner
  4. Being respectful to your neighbors
  5. Vacating the property on or before the day the lease it up

Legal Implications

Being a good renter can

  1. Boost your credit
  2. Build a positive rental history
  3. Open up more rental options to you

Being a bad renter can

  1. Decrease your credit
  2. Damage your rental history
  3. Make it difficult for you lease again
  4. Make it difficult for you to get loans or credit cards / credit lines

Ending Your Lease

Typically your lease would end when the lease is ‘up’, i.e. the end of the lease contract. Most landlords require 60 days written notice on your decision to renew or not renew. This will likely be outlined in your lease or lease paperwork, however, you should ask. If you are choosing not to renew, you will likely need this time anyway to secure another apartment or rental for on or before your move-out-date (the last day of your lease). You will be expected:

  1. To be out of the apartment
  2. To have removed all your belongings and trash
  3. To have cleaned the apartment on or before your move-out-date. Any additional days you or your belongings occupy the property without the landlord’s express, written consent, will entitle the landlord to additional rent and potential damages.

on or before your move-out-date. Any additional days you or your belongings occupy the property without the landlord’s express, written consent, will entitle the landlord to additional rent and potential damages.

If you are a first time renter, renting an apartment can be very intimidating. That is where an experienced apartment locator or apartment finder can really help you navigate the waters and find the perfect apartment rental for you! If you need help finding your first (or next :-) apartment, don’t hesitate to call us or submit a search request!

Call us today at 512-318-2702 Submit an Apartment Search Request

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