Financial Resource Center


Renters' Guide: What to Know Before You Sign a Lease

by Judy Dahl / December 17th, 2007

Are you planning to move to rental housing soon, possibly for the first time? Be sure to do your homework, or you could find yourself stuck with a long lease to a dilapidated apartment or house, with a landlord who refuses to make repairs and who then keeps your security deposit when you move out. Here's how to avoid those problems and more.

What do you want?

Before even looking for rental housing, figure out what you want and—perhaps more important—what you can afford, advises David Dorfman, publisher of, Asbury Park, N.J. The Web site provides information to tenants and landlords about their rights. "Determine how much you can afford to pay each month and come up with a budget," he says. "Don't forget that, in addition to rent, you may have to pay for utilities—electricity, gas, water—and you'll be buying your own food," he continues. "That's in addition to car payments and whatever other expenses you may already have." Then determine what type of place you'd like to live in.
  1. Do you want to rent a whole house, or an apartment?
  2. If you have children, what's your preferred school district?
  3. How long a commute can you handle?
  4. If you don't have a car, how close will you want to be to stores, entertainment, and public transportation?
After deciding what neighborhoods will suit you, check the classified ads for available properties and make appointments to see them. If you're a college student, your school's housing division probably will have listings as well. "When you find a house or apartment you like, investigate it the best you can," Dorfman recommends. "Look into the management company's reputation. Ask the neighbors how it's managed and about crime in the area, and look around to see if it's clean and well maintained. Drive around the area to get a feel for it."
The most common mistake renters make is failing to document the condition of a place when they move in.

Examine the lease

If you're serious about the place, get a copy of the lease in advance and read it carefully. If you know an experienced renter, ask him or her to review it with you to spot potential problems. Look at:
  1. The security deposit amount (typically one or two months' rent), and under what circumstances the landlord can keep all or part of it
  2. Whether you'll pay for heat and electricity
  3. The type of heat (gas is usually cheaper than electric)
  4. Whether you'll pay for water
  5. If you have a pet, whether it's allowed and if there's a separate pet security deposit
  6. If there are no window coverings, whether you need to supply them
  7. Whether any late payment fees are reasonable
  8. The amount of notice a landlord must give before entering the dwelling
Educate yourself about your legal rights, advises Janet Portman. She is an attorney and managing editor at NOLO, a publisher of do-it-yourself legal books and software in Berkeley, Calif., and author of "Renter's Rights" and "Every Tenant's Legal Guide." "It's not something that's intuitively obvious." For example, a landlord might insert a clause stating that if you break a rule, he or she can do a "self-help eviction," by turning off your utilities, changing the locks, or even depositing your belongings on the curb. "A judge would overturn the eviction, but at that point it's cold comfort," Portman says.
To avoid wrangling with roommates, develop a written agreement outlining rights and responsibilities before you move in.
A lease with such clauses may be a sign of an unscrupulous landlord. But if you're still interested, attempt to negotiate. "There's always room for negotiation, starting with the rent," says Portman. A landlord may tell you a lease is standard, or that clauses are legally required, but that's not the case, she notes. "That's an attempt to make you believe the terms are set in stone." Depending on the market—how many other renters are clamoring for the apartment—you may or may not be successful in negotiating the rent.

Inspect the place

Once you're satisfied with the lease—but before you sign it—conduct a thorough inspection of the apartment. "The most common mistake renters make is failing to document the condition of a place when they move in," says Portman. "If they don't, they can get charged for pre-existing damage when they move out." Walk through with your landlord or property manager, and use a checklist to record the unit's condition. Make sure everything works—appliances, water pressure, drains—and that carpets, walls, floors, outlets, fixtures, windows, and other items are in good shape. Think about safety, too. "Make sure there are [working] smoke alarms—so many people get killed when alarms are missing or not working," Dorfman cautions. "Look for carbon monoxide detectors too; they're required in most states." Note any problems in detail, and then you and your landlord should sign the checklist and keep copies. You can find a sample move-in checklist at You also may want to use video or photos to document the unit's condition. Date-stamp the photos or videos to show when they were produced, and send your landlord copies immediately. Then when you move out, your landlord won't be able to claim you caused the damage and make deductions from your security deposit.
When you rent, you're taking a real chance if you don't purchase renters insurance.


If you're going to live with roommates, check their references if you don't know them. Remember that, even if you all sign the lease, you're each responsible for the full amount of the rent if the others don't pay—or if they move out ahead of time. Sometimes landlords don't enforce this policy, notes Portman. "If the blameless tenants can differentiate themselves from the irresponsible one, the landlord may want to keep them rather than evicting them and having to find several new tenants." Still, to avoid wrangling with roommates, develop a written agreement outlining rights and responsibilities before you move in together. Include:
  1. Rent—Who pays what and who writes the check if the landlord will accept only one each month?
  2. Space—Who gets which bedroom?
  3. Chores—Who does what when?
  4. Food—Will you shop, cook, and eat together? Who pays what and who does what?
  5. Noise—When should you turn music or TVs down low?
  6. Overnight guests—How often is it OK to have them?
  7. Moving out—How much notice must a roommate give before leaving, and must that person find an acceptable substitute?
  8. Mediation—Include a clause that, in the case of a disagreement, roommates will participate in mediation before moving out or going to court. Identify what qualifies as an acceptable mediator—your mom might not count.
In addition to rent, you may have to pay for electricity, gas, and water.
NOLO offers a sample roommate agreement on its Web site.


Once you move in, your landlord is responsible for keeping your apartment in livable condition, maintaining a sound structure; working power, heat and plumbing; hot and cold water; and getting rid of pests. "If the problem has to do with essential safety and cleanliness, then in essentially every state you have the right to demand it be fixed or you can move out," says Portman. "In some states, you can repair it yourself and deduct the cost from your rent, or withhold rent until it's fixed." With less serious problems, your landlord's responsibilities are less cut and dried. Check the terms of your lease, local and state building codes, and state law to see if your issue is covered. Landlords are not legally required to make cosmetic repairs, such as replacing worn carpeting, but to give your landlord an incentive to make repairs, send a written request and outline the problem clearly. Explain that the problem might become worse and cost more if not repaired promptly, and whether there's a potential for injury—and landlord liability. For example, someone could trip over a hole in stairway carpeting. If your landlord refuses to make repairs, propose using a mediation service to help you reach agreement. You also can report your landlord to a local building or housing agency if the problem needing repair violates building codes. If the problem reduces the value of your apartment, you could take your landlord to small claims court. Keep in mind, though, that these last two options are likely to sour your relationship with the landlord.
If you're serious about the place, get a copy of the lease in advance and read it carefully.
In general, you're not responsible for normal wear and tear on a rental unit, but if you cause damage through carelessness or misuse, you are responsible for its cost. Landlords' responsibilities vary by state, but they're typically required to return your security deposit or an itemized listing of any deductions within 14 to 30 days after you move out.

Renters insurance

When you rent an apartment or house, you're taking a real chance if you don't purchase renters insurance, because your landlord's insurance protects the building, but not your belongings. Renters insurance policies usually cover damage from many types of natural disasters, along with theft or vandalism, vehicles, and other causes. The policies typically include coverage for your living expenses if your home is uninhabitable for a time, as well as liability coverage for injuries others incur in your home. Note that the policies don't cover flood or earthquake damage, or wind damage in hurricane-prone areas. You'll have to purchase separate coverage, called riders, for those. Generally, you also have to buy a separate rider for unusually valuable property, like a diamond ring. As with other types of insurance, premium costs vary so shop around to get the best deal. To help you get an appropriate settlement if you file a claim, you should have a detailed inventory of your belongings, including each item's value and serial number, if applicable. Take photos or videos of each room in your unit, including closets and drawers. In case of a disaster, this will help you prove the value of your property.

Moving out

At the end of your lease, clean your apartment thoroughly and walk through it with your landlord. Use your move-in checklist to assess the unit's condition compared with when your lease began. Note any differences, and then you and the landlord should sign and date the checklist. You may want to take another set of photos. "That's the basis for any deductions from your security deposit," explains Portman. "If your landlord makes any other deductions later, you have some pretty good evidence they've been concocted."
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