6 Steps Renters Should Take Before Signing a Lease
No need for rental panic. If you sign a lease for an apartment or house, you will probably come out of the experience just fine. After all, the landlord-tenant model has generally worked well for centuries. In fact, 43 million U.S. households live in rented properties, according to the Joint Center for Housing Studies of Harvard University.
But problems do crop up, whether you're a novice or an experienced tenant. Here are a few issues to consider and steps to take before signing a lease.
Don't rush. Maggie Graham, a marketing manager for Promet Source, a Web application development company in Chicago, came to this conclusion after a lot of trial and error. "Give yourself enough time so that you won't make a decision out of desperation. If you're desperate, you'll overlook minor things like having enough windows," Graham says.
Graham is also an actor who has worked with numerous theater troupes over the years, performing and renting in Cincinnati, rural Indiana and Chicago. "I've lived in about nine places in 10 years," she says.
[Read: 10 Reasons It's Better to Be a Renter.]
She once rented a $600 apartment in Chicago. The price was incredible, but there was only one skylight window and the roof was angled. Graham, who is just over 6 feet tall, realized too late: "I%VIRTUAL-pullquote- "Many large apartment buildings use dynamic pricing, much like airlines, that factor in current demand, which is at its peak on the weekend."% couldn't fit in the place." The front door lock was also broken. "Once, a creepy dude followed me home, and I had to pretend to unlock and lock it," she says.
Graham has a wealth of advice for renters, like flushing the toilet and making sure it works during the walk-through. "Looking to skimp on location? Visit the neighborhood at night," Graham says. But above all, take your time and don't let anyone pressure you into signing a lease. "If you're renting through an apartment-finding company, they will pressure you that this is going to go fast -- lies, all lies," Graham says.
Read the fine print. This is another reason not to rush. Looking over the details takes time, but choosing a place to live is a big decision. Much of the fine print will be boring legalese, but some details you may find quite alarming.
"A few years back, I made a verbal commitment for a year lease and thought that was on the contract, but I didn't double-check the year," says Courtenay Sprunger, who owns Big Sky Public Relations in Kalispell, Montana. "The landlord," she adds, "made it for two years, and he held us to that contract."
Another thing to check is how much it costs to break your lease. Nitin Shingate, CEO and co-founder of RentalRoost.com, a startup that specializes in helping people find rentals based on their lifestyle, says when he moved from Los Angeles to San Francisco, he didn't realize his lease stipulated that if he moved out early, he would have to pay three months of rent. That turned out to be $9,000.
"Hey, this was L.A.," Shingate says. He adds, "Most people don't pay attention to the rules about breaking the lease, but it's really a critical question you should be asking."
[Read: Breaking an Apartment Lease: What You Need to Know.]
Get everything in writing. Sometimes the lease isn't detailed enough, which could spell trouble if expectations aren't discussed and spelled out beforehand. If you do discuss expectations with a prospective landlord, "get all promises in writing," says Melisa Alaba, a speaker and life coach based in Bolingbrook, Illinois. "I have been duped by landlords stating they were going to take care of an issue after I moved in, and then later forgetting about it or fixing the issue months later."
One reason a lease may not be detailed is that not every rental is a 10-story apartment building owned by a corporation with a live-in building manager. You might be renting from a "reluctant landlord," says Vikram Raghavan, another co-founder of RentalRoost.com. "You know, the person who moves to another state and is stuck with a property he can't sell." Alaba probably had one of those landlords when she lived in Georgia. She rented from a private owner who one day gave her a general statement that the landlord had a right to inspect the property.
Monthly inspections were not in the lease -- not that Alaba could do much about it. "I had to explain to him that he could not enter the property without me being present or at least give me 24-hour notice," Alaba says. She moved out as soon as the lease was up.
Alaba also learned that tenant-landlord laws tend not to be mentioned in a lease's fine print. But if you study up on them beforehand, you might be able to negotiate something you don't like before you sign.
"When I moved to Georgia, where there is a huge bug and rodent issue, I learned that the tenant was responsible in most cases if the landlord put it in the lease. In Illinois, the landlord is obligated to take care of those issues," Alaba says.
Ask if your landlord or manager lives nearby. Ideally, at least someone who works with the landlord or manager lives nearby. "We rented from a friend who moved to Hawaii,' says Jessica McAuliffe, an attorney who owns a photo studio in West Jordan, Utah, and now lives in her own home.
Since McAuliffe's friend didn't have anyone local who could do repairs or serve as a trusted liaison, "it was difficult to get things fixed," McAuliffe says. "He rarely believed us when things went wrong." There was another annoyance at the end. "When we moved out, we didn't have anyone to give our keys to," she says.
Tour rental properties during off times. It depends on the city and the demand, of course, but "you're better off touring and visiting [rental properties] during the week instead of the weekend," says Dan Laufer, CEO of RentLingo.com, which offers rental reviews and listings. "Many large apartment buildings use dynamic pricing, much like airlines, that factor in current demand, which is at its peak on the weekend."
Laufer adds that for smaller properties, the week is likely to be a quieter time, and you'll have more time to think about the place before signing.
And if you live in a city where space is at a premium, you may find that you have to be extremely aggressive in going after a rental property. Raghavan says that in San Francisco, where he lives, he has heard of properties having open houses and being rented within about 10 to 15 minutes. "People will bring their own background checks, hand it and a check to the landlord and say, 'I'm good to go,'" Raghavan says.
[See: 10 Ways to Cut Your Spending This Week.]
Do some digging on your landlord. Just as you'll have to fork over some references, you should know something about the property owner you're renting from. Go to the search engines and look for anything fishy. Alex Freeburg, an attorney in Jackson, Wyoming, specializes in tenant-landlord conflicts and says it's wise to know whether the person who will receive your rent check has money problems.
"One of my clients had the landlord keep their damage deposit," Freeburg says. "If they had checked the public records available on the county website, they would have seen that the landlord had a lien against their property and was in financial trouble."
You can't argue with his logic, although it's difficult to imagine being thorough enough to pore through a landlord's public records. But if you at least read the lease, you won't just rent a home -- you'll buy some peace of mind.