Before You Sign: Essential Checks for Lease Agreements

0

Signing a lease agreement is a significant commitment, whether it’s for a car, apartment, or commercial space. Before putting pen to paper, it’s crucial to thoroughly review the terms of the lease to avoid any surprises down the road. In this blog, we’ll discuss what to check before signing a lease agreement in the United States to ensure you’re making an informed decision.

Buy a Car.  Lease a Medallion
Buy a Car. Lease a Medallion” by Boss Tweed is licensed under CC BY 2.0.

Review Lease Terms and Conditions:
The first step in checking a lease agreement is to carefully review the terms and conditions. Pay close attention to details such as the lease duration, monthly rent or payments, security deposit requirements, and any additional fees or charges. Make sure you understand your rights and responsibilities as a tenant or lessee before signing on the dotted line.

Inspect the Property or Vehicle:
Before signing a lease agreement for a property or vehicle, it’s essential to inspect the condition of the asset thoroughly. For rental properties, walk through the unit with the landlord or property manager to identify any existing damage or maintenance issues. Take note of any repairs or improvements needed and document them in writing. Similarly, inspect the vehicle for any signs of damage or wear and tear, both inside and out.

Check for Lease Termination Clause:
Review the lease agreement for any provisions related to lease termination. Determine whether there are any penalties or fees for breaking the lease early and under what circumstances termination is allowed. Understanding the lease termination clause will help you plan accordingly and avoid potential financial consequences if you need to end the lease prematurely.

Understand Maintenance and Repairs Responsibilities:
Clarify who is responsible for maintenance and repairs under the lease agreement. In rental properties, landlords are typically responsible for major repairs and structural maintenance, while tenants are responsible for day-to-day upkeep and minor repairs. Make sure these responsibilities are clearly outlined in the lease to avoid disputes later on. For leased vehicles, understand your obligations for routine maintenance and repairs as outlined in the lease agreement.

Verify Lease Renewal Terms:
If you’re considering a long-term lease, such as for a rental property or commercial space, verify the lease renewal terms. Determine whether the lease automatically renews at the end of the term or if you need to provide notice to renew. Understand any changes in rent or lease terms that may occur upon renewal and factor them into your decision-making process.

Review Pet and Guest Policies:
If you have pets or anticipate having guests stay with you regularly, review the lease agreement for any restrictions or policies related to pets and guests. Some leases may prohibit certain types of pets or impose additional fees for pets or guests. Make sure you understand these policies and are comfortable with them before signing the lease.

Check for Subleasing and Assignment Clauses:
If you anticipate needing to sublease the property or assign the lease to another party, check the lease agreement for any provisions related to subleasing and assignment. Determine whether subleasing or assigning the lease is allowed, and if so, what conditions or requirements must be met. Understanding these clauses will help you plan for potential changes in your living or business situation.

Consult Legal and Financial Advisors:
Before signing a lease agreement, consider consulting legal and financial advisors for guidance. An attorney can review the lease terms and advise you on any potential risks or concerns. Similarly, a financial advisor can help you assess the financial implications of the lease and ensure it aligns with your budget and long-term goals.

Before signing a lease agreement, it’s essential to conduct thorough checks to ensure you’re making a sound decision. Review the lease terms and conditions, inspect the property or vehicle, check for lease termination and renewal clauses, understand maintenance and repairs responsibilities, review pet and guest policies, check for subleasing and assignment clauses, and consult legal and financial advisors as needed. By taking these steps, you can sign a lease agreement with confidence, knowing that you’ve done your due diligence and protected your interests.