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Signing a Rental Contract? 10 Essential Clauses to Look Out For

Emily Calorino-Sipe - Writer for Top10.com
a man sitting in front of a laptop computer holding papers
The thrill of a new home can often overshadow the need to scrutinize a rental contract’s fine print.

Glossing over the details is one of the biggest mistakes you can make when signing a rental contract, trust me. There’s a lot to think about when moving into a new space: home warranties, moving costs, and where to put everything. But the first step is to put pen to paper on this legal document.

A lease agreement is legally binding and warrants careful reading. You could face substantial costs for early lease termination, property damage, or rule violations. Landlords may also not meet living standards or housing codes and risk legal repercussions and potential compensation costs.

» A home warranty can save you money. Find out the benefits of a rental home warranty.

1. Security Deposit

Look into the details for your security deposit—it isn’t for monthly rent. When your lease ends, you should get it back. If the landlord deducts any amount, they must provide a list of repairs and costs within a time limit set by state laws.

Your landlord should cover the normal wear and tear of items not covered by a home warranty. Depending on where you live, the deposit amount can be one, two, or three times your monthly rent. This amount is kept in a special account just for deposits. In some places, the law even requires landlords to put the deposit in an account that earns interest.

2. Maintenance and Repairs

It’s important to know who’s responsible for what when it comes to home maintenance and repairs. As a tenant, you must keep the property clean and safe to avoid common house repair costs. This might mean you have to take care of the lawn, take out the trash, and change light bulbs and air filters.

Landlords typically handle more extensive repairs like fixing HVAC units, plumbing, or washers/dryers through home warranties like Choice Home Warranty or Select Home Warranty. They also have to make sure the rental is safe and livable. If something breaks or becomes unsafe, they must fix it. For instance, if a leak damages the floors, the landlord must repair the cause and replace the floors.

» Check out our top picks for the best home warranties for plumbing.

3. Lease Term and Renewal

The lease term is the time you’ve agreed to rent the property. When renewing your contract, you could have an automatic renewal clause requiring you to inform your landlord if you decide to move out eventually. You could also switch to month-to-month rent after a year-long lease.

When the lease ends, the landlord may change the terms, including the monthly rent. Consider if you want to stay before your contract ends. You may face a fee if you can’t pay the rent for the lease term. I always remind people to leave the property as it was when they moved in to avoid deductions from the security deposit.

4. Tenant Rights and Responsibilities

As a tenant, you have certain rights and responsibilities. You have the right to safety and security and stay in the unit until the lease ends.

If your landlord doesn’t meet livability standards, like rats, sewage issues, lead paint, or structural damage, you can sue them. You can also file a suit if they evict you for unjustified reasons that contradict the terms of your contract.

5. Renewal and Rent Increases

In a fixed-term lease, landlords can’t raise the rent until the agreement ends. They can increase the rent at that point, but how much they can raise it depends on your state’s laws.

Some states have rent stabilization laws that limit rent increases. For example, rent can only be increased by a maximum of 3% in New York for a one-year lease.

6. Entry and Privacy

Rental contracts usually specify when and how a landlord can enter your unit. Typically, they must give you a notice 24 to 48 hours in advance. Knowing this will help you protect your privacy.

Some rental agreements may also include provisions about emergencies where a landlord might be allowed to enter the property without notice. So, it’s always a good idea to read your lease agreement carefully and ensure you’re clear on this part.

» Costs adding up? Consider these common property expenses for renters.

7. Dispute Resolution and Legal Recourse

If you have a dispute with your landlord, you can take it to small claims court. Some rental agreements say you have to solve problems through "mandatory arbitration" instead of court, which is like a private way of solving disagreements.

But when you discuss the rental agreement, you can ask to skip this rule. This way, if you ever need to get your deposit back or settle other issues, you can go to the special court. If the court decides in your favor, you might even get your court fees paid and extra money for the trouble.

8. Subletting and Guest Policies

Rental agreements often have rules about subletting and guests. Some landlords are okay with subletting as long as they give the green light, while others might not allow it at all. If you think you might have a friend crash for a while or want them to compensate you, make sure you know the policy.

Rental agreements also often specify how long a guest can stay. For example, a guest may be allowed to stay for a maximum of 14 days consecutively on the property for six months or seven nights. Violating these terms could get you in trouble, so it’s better to be safe than sorry. If the agreement isn’t unclear, don’t hesitate to ask your landlord for clarification.

9. Termination and Notice

The rental contract should clearly explain how to end the lease, including how much notice you must give. This is crucial because you don’t want any surprises or penalties when it’s time to move out.

The lease agreement may also specify the conditions under which the lease can be terminated early. For example, there may be provisions for terminating the lease due to a breach by either party. I suggest planning ahead. If you know you will move out, give enough notice. And if anything needs to be clarified, ask your landlord to explain it.

10. Pets and Additional Fees

Rental contracts often have rules about pets. These might include animal breed, type, and size restrictions. They might also require a higher security deposit or monthly rent, and there’s usually a limit to the number of pets allowed.

You'll need a pet addendum if you want your pet included in the rental agreement. Watch out for no-limit liability clauses that make you fully responsible for any damage caused by your pet.

Signing a Rental Contract: Cover All Your Bases

You always have the right to negotiate the terms of your lease. Even if a potential landlord says you can't, they must abide by local laws and regulations for landlord-tenant relationships. They may not agree with every change you want to make, but they must respect your rights as a tenant.

Here’s a bonus tip: Always check your local laws and regulations to know your rights. This knowledge will empower you in any discussions or negotiations with your landlord. After all, being well-informed is the best way to ensure a positive and fair renting experience.

» First time signing a lease? Check out our first-time renters' guide.

Emily Calorino-Sipe - Writer for Top10.com
Emily Calorino-Sipe holds a bachelor's degree in business administration, focusing on international communication. She is a relocation expert that helps clients through each stage of their journey worldwide. Her writing is a clear, informative, and reliable resource for anyone planning a move.