Entering into a lease can be a great opportunity for tenants in the Centre County and surrounding areas. After all, students typically don’t stay in the area for more than a few years, and in today’s economy, it is not possible for many people to purchase a house. However, it is important that all tenants understand their lease before signing it, as once a lease is signed, the tenant is bound by its written terms.
Below, I would like to describe the ‘Top 5’ provisions of a written lease that I frequently see cause tenants the most trouble:
- ‘Joint and Several’ Leases – It is important to understand that leases are typically ‘Joint and Several’. This means that if there is more than one Tenant, any Tenant can be held liable for any type of damages or unpaid rent associated with the written lease. Thus, before entering into a lease agreement, it is important that the Tenant feels his or her co-Tenants are trustworthy. It can be very difficult for a Tenant to understand why he or she is being sued for unpaid rent, when it was the other Tenant who shirked his obligations under the lease.
- ‘Acceleration Clauses’ – In some written leases, there is a provision called an ‘acceleration clause’. An acceleration clause is basically a clause stating that if a Tenant moves out before the end of their lease term, the amount of rent due for the entire lease term is immediately due. For example, let’s say Tenant A signs a written lease where rent is $1,000.00 each month, and the lease is in effect from July 1, 2012 – July 1, 2013. Tenant A decides to go overseas for a semester and moves out December 31, 2012. Let’s also presume that Tenant A made timely rental payments. If Tenant A’s lease has an ‘acceleration clause’, then Tenant A will immediately owe the Landlord $6,000.00 after Tenant A moves out, because that is the remaining amount of rent due under Tenant A’s lease.
- ‘Co-signors’ on a Lease – Often, Landlords will ask that their Tenants have a ‘co-signor’ on the lease. A co-signor is someone who assumes equal liability for the lease, even though he is not named as a Tenant. For students at Penn State, the co-signor often ends up being a parent of the student. The purpose of having a co-signor is to provide the Landlord a ‘guarantee’ that the rent, and any damages to the unit, will be paid by a financially responsible person. Co-signors need to be aware that by signing the lease, they bind themselves to the provisions of the lease as if they were a Tenant. This means the co-signor can be sued for damages as well as any unpaid rent or other fees for which the tenant is liable.
- ‘Damages’ at the end of the Lease – I have seen many tenants seek legal advice at the end of their lease term regarding ‘damages’ to the rental unit. Often, tenants are very surprised that, for example, all of their carpet has been replaced at their expense, or that the landlord claims the tenant damaged parts of the rental unit the tenant states were already damaged at move-in. One of the first questions I ask is – ‘Did you inspect the rental unit before moving in? Did your landlord provide you with any type of ‘move in’ report you could fill out and return to them, prior to moving in? Unfortunately, many tenants state they never filled anything out about the condition of the rental unit prior to moving in, even if that option was offered to them by the landlord. It is vital that tenants remember to inspect the rental unit before move-in, as it will be very difficult for the tenant to prove he or she didn’t cause the damages without it.
- Roommate disputes –Tenants will often decide to enter into a lease with another tenant he or she does not know very well. This holds especially true in a college town such as State College, where students are often from different cities or states. Unfortunately, mainly because of personality differences, these types of situations don’t always work out. Sometimes it becomes so unbearable for a tenant that the tenant moves out before the end of their lease term. This can cause a difficult situation for both the tenant who leaves and the remaining tenant. Since the lease is most likely ‘joint and several’, both tenants are still liable for the rent and any damages, even though one tenant has moved out. The remaining tenant may not be able to afford rent alone, and the tenant who left may not care to keep on paying the rent. Conversely, the tenant who left may want the remaining tenant to keep up on the rent so that he or she is not sued or suffers a negative consequence on their credit report, but the remaining tenant cannot afford the full amount of rent alone.
It is important for a tenant to understand that in most circumstances, a landlord is not obligated to replace a roommate, or let one tenant out of a lease, simply because the two tenants do not get along. It is important to choose your co-tenant carefully and wisely, so that you do not end up in this type of situation.
However, if you do end up in this type of situation, it is still important to discuss it with your landlord as soon as the situation arises. Sometimes a landlord will allow you to try and find a ‘replacement tenant’; basically, another tenant who is willing to take over your obligations under the lease, and therefore release you from further obligations under your lease, allowing you to move out.
Please note that the above list is not meant to be exhaustive of potential problems a tenant may face with their landlord/tenant situation. It is only meant to highlight common areas of dispute that I have seen during as a landlord/tenant attorney.