Residential leases are contracts. Specifically, they are contracts that assign a possessory interest in a dwelling such as a house or apartment. This means that you, as a tenant, have the right to own the property in exchange for valuable consideration (usually money). another lost part or all of a deposit when they didn’t deserve it or has been asked to vacate a property for little or no reason. To prevent these things from happening, it is important that you understand the lease BEFORE you sign it. Here are 10 important steps to take (in no particular order) when entering into a lease:
1. Carefully read the entire lease. If you have any questions about the meaning of something, ask the landlord (preferably with a witness present).
2. Pay attention to the mention of a requirement to give notice before the termination of the lease, so that it is not renewed for a period of time.
3. Some landlords list items that the tenant is responsible for keeping in good repair while occupying the property. The landlord may include items that are not generally the responsibility of the tenant, such as central heating/air conditioning, plumbing, etc. These items are often expensive to repair, you should avoid a lease that has these types of items listed as his responsibility.
4. Seek a remedy for early termination due to job change, marital relationship or even because you can’t pay the lease. Some landlords will say you lose your deposit and charge you a month or two of rent if you terminate early. Others do not mention a remedy in which case they could hold you responsible for the remaining balance of the lease.
5. Pay attention to special conditions, such as how many guests you can have and what activities may or may not be allowed. Many landlords will make living a normal life in the leased space nearly impossible under such conditions. (Although, they probably WON’T enforce these conditions unless you start to annoy them – then it’s a good way to try to evict them – you don’t want that hanging over your head.
6. Look for a grace period. This is a period of time when you can still pay your rent and not pay a late fee. Example: “Rent is due on the 1st of each month during the term of this lease. If rent is not received by the 5th day of the month in which it is due, a $100 late fee will be assessed.” This means you have a five-day grace period. This is helpful since paydays can change and since your rent is likely to be the largest of your bills as a renter, you may need an extra couple of days to get to your next paycheck to pay your rent.
7. Look out for nasty late fees or penalties. Some owners will charge a flat fee for being late, others will charge a daily amount; some will charge a combination of both. The important thing is that if you had to pay your rent a week late, would you be able to pay it? If your rent is $750 with no grace period, $100 late fee if not received by the first and $25 per day if not received by the third of the month; you would have to pay $1025 on the 10th of the month. Always calculate the worst case. If the latest you would pay your rent is the 4th, then calculate accordingly. You know your paydays and rental history, make sure the numbers work for you.
8. Do not sign a lease that you disagree with or that you think will end with an inability to pay rent, late fees, or eviction. The vast majority of people with bad rental records are not bad people; they are people who have made bad decisions regarding their rental agreements. If you sign a lease with the first person who will rent to you with bad credit, you can expect the landlord to stereotype you as a slacker and take every opportunity to get fees and penalties from you. They will be the landlords who will show up unannounced “to check on your house” and tell you that you need to clean up the place or you will be evicted. They will be the owner who will drive by the property and call you at work to tell you that you need to mow when you get home. You understand.
9. Communicate with the landlord in writing (email works) or when writing is not practical, with a witness. If the landlord calls you on the phone, try to have another adult listen in on the conversation. If the owner (specifically his voice) is not known to the “witness”, be sure to identify the owner by his name during the conversation. Example: The landlord calls to inquire about a problem such as back rent. He immediately puts it on speakerphone so his witness can hear. Then you say something like “Sorry, who did you say that was?” They should respond something like: “This is Sam Anderson, his landlord.” Then, if he lets you know that he will pay the rent on a specific day and he agrees, he can’t take action until that date has passed or another reason for eviction arises. If he tries to say that he didn’t agree, he has his witness. If your lawyer asks on the phone how you knew it was Sam Anderson…you guessed it…because he told us it was him!
10. Be sure to keep a copy of the signed lease! After reviewing the lease, both you and the landlord must sign it at the same time. Do not rely on the landlord to send you a copy once you have signed it. Do not send a signed copy to the landlord for them to sign and return. Remember, if there is no producible lease then it is difficult for you to defend yourself in any action for eviction, damages, etc.
Disclaimer: There are many things to understand about a lease or any contract; in fact, too many to list here. The only way to ensure that the lease you sign is valid, fair, and legal in the state of Indiana or another jurisdiction is to have it evaluated by an attorney.