Reviewing a Lease Agreement

Entering into a lease agreement is typically a significant financial decision.  Therefore, paying attention to the following terms can protect your rights and your pocketbook. It is always prudent to have an attorney review the lease, to ensure you understand the terms and conditions. The following are commonly found issues that one should understand before signing:

1. Periodic Lease vs. Definite Term Lease
If the lease does not mention the length of the tenancy, the lease is periodic, which means the rental period runs from one rent payment to the next, for example month-to-month. If the lease does state how long the tenancy will last (often six months or a year), the agreement is a definite term lease. Term leases provide more protections for the tenant, since changes to the lease are very limited prior to the end of the term. If the tenant desires more consistency in his/her living situation, then he/she should seek a longer definite term.

2. Ability to Increase Rent or Fees
If a lease is a month-to-month, typically the landlord reserves the right to increase rent or change other terms with one month and a day’s notice. Of course, this does not mean the landlord will, just that landlord has the ability to make this material change unilaterally. Again, if the tenant desires more consistency, a longer term lease is likely a better option. For example, in a one year term lease, the landlord will likely have agreed to not increase rent or fees for that one year period.

3. Notice Period
What advance notice is required prior to terminating the lease? It is important to know how much notice must be provided and if that is going to work for your living situation. If the lease does not state a notice requirement, state law requires that written notice be given one full rental period plus one day before the tenancy ends. If the tenant does not adhere to this requirement, the tenant may compromise his/her timeline for termination. The landlord will also use the notice period to notify the tenant of material changes, such as increase in rent.

4. Pets
Be careful to review the lease for any terms relating specifically to tenant’s right or prohibition on possession of an animal. If not addressed, there is no prohibition, but usually addressing this with the landlord is a good idea, since it can easily become problematic in the future. If you have a medically necessary companion animal or service animal, contact an attorney to fully understand your right to possess this animal at your new residence, regardless of what the lease indicates.

5. Security Deposit
Many tenants think the security deposit (which is often one month’s rent) can be used to pay the last month’s rent. Minnesota statutes prohibit the security deposit from being used in this manner, so even if this the lease does not address this, do not anticipate using the deposit for last month’s rent.

6. Who May Reside in the Property
All potential residents should be listed as residents in the lease agreement; otherwise prospective tenant should understand his/her ability to add an individual later and the landlord’s opportunity to decline this addition.

Remember to contact our firm to have your lease agreement reviewed before you sign.

Attorney Lauren T. Skildum