Breaking Down the Standard Residential Lease Agreement
Whether buying or leasing a property one thing is for certain, you will sign and initial more paperwork than you ever imagined. Therefore our first installment of â€˜Real Estate 101â€² will be breaking down the 6 page â€˜Residential Lease or Month-to-Month Rental Agreementâ€™, the first and most important contract when signing a lease.
1. Whilst it may seem simple and obvious, a lease agreement is a legally binding document so be honest. When it asks you to state persons staying in the property list them all. Do NOT claim sole residency, you will be surprised how often you will see your landlord during the term of your lease.
2. Item 1c. on the contract is extremely important to take note of. It is in this section that the landlord will stipulate what items, appliances and other personal property will be left during the tenancy. For example, if you are expecting all appliances and some potted plants in the backyard to be leftÂ it is here that it will be written.
3. Item 5. is an extremely important section that every renter needs to understand. After all, this is the section that breaks down your costs and monthly commitments, and unsurprisingly, this is also the section I get most questions about. To aid my explanation I have included an example from a lease agreement completed for a client just this week.
In this example the tenants are already in possession of the property but would like to extend their contract on a month-to-month basis. Because their original contract had a definitive end date a new contract had to be written up detailing the new specifications. In the above example you will see that the first columnÂ â€™Total Dueâ€™ shows the move in costs to be $3,000 for 1st months rent, $3,000 for security deposit and $1,000 for pet deposit but if you look in the next column â€˜Payment Receivedâ€™ it shows that $3,000 has been paid for the security deposit and $1,000 has been paid for the pet deposit therefore in the next column â€˜Balance Dueâ€™ the tenant only has $3,000 for Marchâ€™s rent Â due on 3/1/2012.
If you are signing a new contract for a property that you are not already in possession of there will be no amounts in column two and under â€˜Balance Dueâ€™ you will see a repeat of all the costs displayed in column one â€˜Total Dueâ€™. A due date (last column) will be next to each expense as some landlords may demand security and pet deposits earlier than the first months rent if you are signing the contract much earlier than the beginning of your lease term.
4. There are two parts to Section 11. that renters need to pay attention to.
Firstly, when renting a house, duplex or condo with outdoor space, make sure that either the landlord is willing to pay for a gardener to take care of the lawn and landscaping etc. or that you will take on the commitment that comes with a garden and outdoor landscaped areas. The example above shows the areas (11.b,c & d) that will tell you who is responsible for maintaining such areas.
Secondly, 11f. is the difference between hassle free living and the lease from hell. When you move into rented accommodation that includes kitchen appliances, an A/C unit, and maybe built-in TVs the last thing you as the tenant wants, is the responsibility of paying for the repair of those items. Section 11f. of your residential lease contract is where responsibility of fixing those items will be stated. Ideally you want this section to remain blank as that means that any items of personal property left by that landlord are left under warranty and the understanding that if anything were to go wrong with the items it is the landlords responsibility to have them repaired and/or replaced in a timely manner.
5. So many times I find leases that charge an additional $100 for parking spaces for advertised units. Watch out for this! In my opinion itâ€™s a silly way to advertise a property, as it makes tenants feel like they are getting nickel and dimed and you never want a potential buyer (in this case tenant) to feel that way but so many agents do it. Also make sure in section A. that if parking spaces are designated, you are shown the garage and the allotted parking spaces and that those spaces are noted in your written agreement. Last thing you want on move in day is to find that your parking space is actually a compact at the far end of the garage and your car door opens to the buildings dumpsters.
6. My feelings here echo those that I wrote for persons occupying the unit, be honest. You may have to put more down on a pet deposit but the last thing you want is to get caught out by your landlord half way through your tenancy and your lease to be terminated.
7. If the property you are leasing is a condo, make sure you are provided with the buildings CC&Râ€™s. You will not believe the restrictions some buildings have and all you need is one nosey neighbor and before you know it youâ€™ve violated HOA rules, possibly subject to fines and/or eviction. For example, there is a condoÂ building in Hollywood that does not allow any homeowner to have a dog over 25 lbs.
I hope this little breakdown helps you as you search for your new home but if you have any other questions about the contract, or any other real estate contract, please do not hesitate to email us at RealRealtyLA@gmail.com.
Below is an example lease agreement that you can download and look over in its entirety.
Example Lease Agreement