Renting Terms Explained
Whether you are renting a home for the first time or have gone through the process more than once, make sure to review some common terms used during the rental process and on the rental contract.
This is the best way to protect yourself before signing a new lease, avoiding mistakes that could end up costing thousands of dollars.
Laws pertaining to rental properties change on a state by state basis, or in some cases, on a city by city basis. By familiarizing yourself with the most common vocabulary used for renting around the country, you will be able to navigate the rental process no matter where you are establishing a home. To get through your next rental application with ease, take a look at some of the most commonly used vocabulary for individuals, types of homes, contract completion and apartment details.
People Involved in the Rental Process
If you are informally renting an apartment from family members or friends, you may not have a rental contract, although it is a good idea to have one regardless of who is renting the property to you. For everyone else, though, legal rental contracts must have signatures from at least two of the following people to be valid:
- Tenants, lessees and renters are all the same person, which is the individual who is trying to rent a property from someone else.
- The landlord or lessor is the person or company that owns the apartment and the other primary executing party of the rental contract.
- Brokers are the intermediaries between tenants and landlords. If you found your apartment with the help of a real estate agent or you have been in touch with an agent in lieu of the property owner herself, that agent is the broker.
- Co-signers or guarantors are people who take on the financial responsibility of your lease. If you do not have the requisite credit history, most properties will allow you to add a guarantor to your contract that would be liable to pay any fees if you fail to meet your obligations.
Types of Rental Homes
When you are looking for an available rental property, it is important to understand what each type of property has to offer. Each different type of rental property offers different benefits to tenants, from more space to more community activities. Here are six of the most common home types you will find up for rent:
- Rent-controlled and rent-stabilized apartments are homes that have rental amounts that are regulated by the local government. Rent controlled apartments generally have very low rental price that were set many years ago. The monthly cost of rent stabilized apartments can increase annually by a small percentage according to local policies, but these homes are also usually available at hundreds if not thousands of dollars under the market rate.
- Market rate apartments are all homes that have rents attached to the rise and fall of the economy. These are the most common type of apartment.
- Single or studio apartments are typically small one-room homes with a kitchen and bathroom.
- Bachelor apartments are single room homes without a kitchen and but usually with a private bathroom.
- A one-bedroom efficiency is a studio that has been divided into separate areas, but is still smaller than the average one-bedroom apartment.
- Townhouses and condos are homes that are part of a closed community and that offer amenities for residents. Townhouses and condos are often attached buildings, though sometimes they are independent structures as well.
- Loft apartments are homes with tall ceilings and windows, often in reconstructed industrial buildings and top floor spaces.
Terminology of Rental Contracts
Beyond the aforementioned vocabulary concerning the people involved in the rental process and the types of home you may be considering to rent, the rental contract itself is full of specific terms that may initially throw you for a loop. Because rental contracts are binding documents with legal weight, making even a simple mistake on your rental contract could end up costing thousands. Become familiar with the following terminology so that you will be able to complete your next rental contract without a second thought:
- The lease, rental agreement or contract are all terms referring to the document that you and the lessor must sign. The contract will provide rules, information about amenities and other necessary information for living in that unit or community.
- The length of agreement of a lease is the length of time that the contract, and thus your time living in the rented space, is valid. In most cases, if either the lessee or the lessor tries to end the contract before the stated length of agreement time is up, the other party may face legal actions or some sort of penalty, agreed upon in the lease.
- Key money refers to money that you pay a landlord or tenant to put your name on a waiting list or another entry system for the next available apartment.
- The application fee is how much it costs you just to submit a rental application for consideration. In some cases, this fee can be waived.
- The broker’s fee is how much the intermediary person earns for facilitating your rental transaction. Brokers usually ask for a fixed fee or percentage of the deposit as payment.
- The credit check and security deposit are two obligatory aspects of all most every rental contract. A credit check is when the property owner runs your Social Security Number to check your financial history and reliability and the security deposit is the sum you pay before moving in to cover any potential damages or missed payments.
- Subletting or subleasing is when you allow someone else to temporarily stay in your home under a separate agreement. The primary lessee is still responsible for any damages to the rental property during a sublease.
- A dispute is any disagreement that you have with your landlord. Pay attention to your rights as a tenant on the lease in the case of a dispute.
- Eviction is when you are asked to leave the leased apartment within a specific period of time for some breach of the rental contract.
Outside of the vocabulary already mentioned, there may be some terms used to describe the home that are somewhat particular to renting and rental properties. You may not encounter all of these terms on your lease, but odds are a few will cross your path. Some of the more specific words you may encounter while renting a new home are:
- The fixture fee is a cost you may have to pay for appliances that are already in the apartment at move in time.
- Amenities are the services or goods provided by the apartment or leasing company. Common amenities include fitness centers, pools, playgrounds, community room and more.
- Facility fees usually refer to costs for use of the spaces and services offered by the community, such as a parking spot.
- Furnished apartments come with basic furniture and appliances for all rooms, such as a bed, sofa, table, etc.
- Utilities are the basic services you use in your home, such as heating or air conditioning, electricity, water, etc. Sometimes utilities are included in the rent price.
- Rental insurance is an optional insurance policy that can protect a lessee from unforeseen emergencies like those caused by theft, water damage, fire and more.
- Full bath and half bath refer to the bathrooms in an apartment. Full bath homes have a bathroom with a toilet, sink and shower or bath tub. Half baths, on the other hand, include only a toilet and sink.