Your Apartment Rental Contract Demystified

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Your Apartment Rental Contract Demystified

Staff Writer · May 7, 2010

An apartment rental contract, sometimes called a “lease,” is an essential element for any rent agreement. Unless you have legal training, however, the terms and layout of such a contract can be quite confusing. Prior to signing a lease, every tenant should understand the contract prior to agreeing to its terms.

The Length of the Lease

A rental contract should identify the length of the lease. Whether for a month or a year or more, the length of time you are entitled to occupy the apartment and are responsible for paying rent ought to be clearly visible and understandable in the contract. A lease that lacks this information is typically considered to be on a month-to-month basis. If a monthly contract term is unacceptable to you, do not sign the lease.

Early Termination Penalties

The rental contract should also clearly state the penalties should you terminate the lease before the end of the term stated in the contract. A typical penalty is payment of the remainder of the lease and any rental incentives you may have received by signing a lease. For example, if by signing a lease for at least a year you received a $100.00 reduction of the monthly rent, you may be required to refund that incentive.

Identification of Funds

Your apartment rental contract will also identify the different payments you must make or have already made to occupy the apartment. First, the contract should list the amount of rent for the apartment. If you should receive a reduction in that amount for whatever reason, the amount of the reduction and the alteration in the amount of monthly rent due will be attached to the contract in the form of an “addendum.” To illustrate, should the rent normally be $1200.00 and you negotiate a $100.00 monthly decrease, the addendum would state that the monthly rent was $1100.00.

Similarly, the contract will identify the amount of prorated rent. Prorated rent is an amount of rent the landlord charges the tenant should the tenant not occupy the apartment for the entire first month of the lease. Usually, rent is charged monthly and due at the beginning of the month. However, if an occupant moves out days or weeks into the first month of the lease or prior to the end of a month and the landlord re-lets the apartment in the middle of the month, a landlord cannot charge a new tenant an entire month’s rent.

Pro-rated rent is calculated by dividing the monthly rent by thirty, the average days in a month.  This number represents the daily amount of for the apartment.  This number is then multiplied by the amount of days the new tenant will occupy the space. This amount is the “pro-rated” rent.

Security Deposit

The contract will also include the amount of the required security deposit. A security deposit is a payment from the tenant to the landlord to protect the landlord in the event the tenant damages the apartment. The landlord is entitled to use the security deposit to pay for any damages, but must return the portion not used for repairs after the end of the lease term.

While an apartment contract can be confusing and frustrating, understanding every part of the contract is imperative for any tenant. Should you be confused about any aspect of the lease, ask questions and do not sign until you are comfortable with all contract terms.

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