Do you want to save yourself thousands of dollars and huge headaches? Before you grab your pen and sign a lease, consider the following tips to increase your lease knowledge. It’s no substitute for an attorney, but it can empower you to know…more than the average Joe that finds himself in a perpetual lease that doesn’t make financial sense and is ruining their hard earned business.
Real estate agents and those in the industry are familiar with leases and the often boring, “legalese” that so many contain. For the rest of the world though, a lease can be a formidable challenge to understand and translate into plain English, at least to the point that it provides useful information on what can and cannot be done, and what agreements you are entering into.
There are many variations though most leases will be comprised of some basic parts:
- Description of leased space
- Term of the lease
- Costs of the lease, including late fees and other charges
- Cancellation or assignment terms
- Inclusions and exclusions of the lease
- Other standard or “boilerplate” agreements
- Date of agreement and signatures
Description of leased space
Do you know what you are getting? Does the description give you enough information to determine what you are leasing? Imagine (or you can do this) if you gave the lease to a friend that knew nothing of real estate, and nothing about your lease; would they be able to determine exactly what you are leasing and take someone there? Whether it is land, a home, an office or a suite in an office building, there needs to be enough information to know what you are leasing. Ask for the description to be clarified if you believe there are issues.
Term of the lease
Seems obvious doesn’t it? It can be missed, in the excitement of a new lease you may not look; in the busy life of an attorney or a real estate broker it may just be missed. Does it specify the date and “until” or “through” that date, that difference can mean an entire day that you were planning on and didn’t have. A lease that is valid until July 1st isn’t likely to include July 1st, a lease that is through July 1st would give you that additional day you may be thinking you have.
Other items to consider: (More info to come on these)
Costs of the lease, including late fees and other charges
Cancellation or assignment terms
Inclusions and exclusions of the lease
Boilerplate items
Date and Signatures
Take the time to understand the terms, if the person who drafted the lease won’t explain the contract, then ask someone else. Be sure you know what you are agreeing to, it is a binding contract and can be a great thing for everyone involved if time is taken to understand the terms.
