When researching a potential location, it can be a challenge to consider the rental property itself, the cost of living, understanding the lease terminology, or comprehending all of the rental terms. Whether you are looking for a duplex, a walk-up, or a single family home, there are plenty of common rental lease terms that describe rentals.
Rental lease terms you should understand
Our goal is to help you find your next rental property by providing you with 50 common terms and lease terminology.
If you are renting a property that has been damaged or requires repairs (not your fault or from a disaster, which is force majeure), your lease may be suspended without rent being charged while the property has been rendered uninhabitable.
A person with a physical disability can reach and occupy an accessible home. Oftentimes, this means ramps, larger doors, bathrooms with lowered switches, wide hallways, and elevators that are leased or government-specified for wheelchair users and people with mobility difficulties.
These devices may include lamp signalers, doorbells, or bed shakers for people with hearing impairments. Those with vision impairments may benefit from handrails and special lighting.
You may be required to keep areas where wheelchairs may go free of items, such as bicycles and trash cans, that could block the path.
Potential tenants must fill out this document for their landlord to determine whether they qualify to rent the property. You may have to provide information, such as references, recommendations, etc.
An arrears situation occurs when you are behind on your payments – whether you have late rent or a past-due utility bill.
5. As-is condition
Rent will be paid for the house in its current condition. If you are renting an as-is space, you must accept all flaws, defects, and repairs that need to be made.
A resident who does not belong to the lease or sublet, but who pays a stipend to reside in the house. The landlord usually provides boarders with meals and does not require them to pay utility bills.
In addition, the owners of these properties have limited rights to occupy properties; therefore, removing them is not a formal eviction process.
Brokers work on commission and help landlords and renters negotiate lease agreements. This requires a license in most states.
8. Building code
It is a set of rules and standards set by the local government which define safety requirements, design requirements, and improvements to the construction and maintenance of buildings.
9. Certificate of occupancy
A document indicating that a rental unit has been inspected, approved as a place to live, and is considered a quality rental unit.
Buildings that are rented out together. Common amenities at clubhouses include office space, tables, couches, TVs, games, and other entertainment options. The clubhouse is accessible to all tenants of the rental property.
11. Common area
Complex areas – such as a gym, laundry room, clubhouse, and outdoor spaces – that are for communal use. The common area is available to every renter in the complex.
An additional (or more) signer of your lease who won’t be residing in the apartment, a co-signer is usually needed for tenants who have a short or poor rental or credit history and require someone to vouch for them (usually a parent or employer).
As a backup, this secondary person is also responsible for upholding the lease terms if you are unable to.
A co-tenant is a couple (or a group of people) who signs the lease with the intention they will occupy the house or apartment together and be equally responsible for all the lease provisions, such as rent. Under the agreement, co-tenants have equal responsibility and legal rights.
14. Credit history
Your credit history, including how you have managed your debt and credit cards, including loans and other leases. This information may be requested by a landlord to ensure you’ll be able to pay the rent and to verify that you have paid your debts in the past.
Your landlord will officially end your lease and ask you to vacate your home after a specific period of time determined by local laws. A tenant who is in default of rent or breaches the other conditions of the lease can be evicted.
16. First refusal right
The right of an existing tenant to have the first option to re-lease a unit at the same rent price or under the same conditions before the space is publicly available for other people to rent or lease.
17. Fixed-term lease
Usually 12 months is the length of a fixed-term lease, when a tenant agrees to rent a home. In contrast, a tenant in a month-to-month lease can decide whether or not to stay each month. When a tenant signs a fixed-term lease, they are required to move out within the defined time period.
Similar to a co-signer, a guarantor is a third party who “guarantees” you’ll pay your rent and fulfill your financial obligations as a renter. However, a guarantor can’t live in the apartment, even if they’re on the lease itself.
A temporary visitor to your apartment who does not reside there, including your or your roommate’s significant other who sleeps over often. While someone visits you, they’re required to abide by the terms of your lease, as well, such as quiet hours, behavior or parking restrictions.
An acronym for heating, ventilation and air conditioning.
In an apartment complex, a Kitty is a combined fund between co-tenants for non-rental expenses, such as groceries, cleaning supplies, and utilities. Usually, all parties agree to contribute equally to the Kitty rather than on a per-use or amortization schedule.
This is a rental term you may be familiar with. A landlord rents out homes on behalf of a property owner or agent. The owner is responsible for fulfilling the lease and is responsible for the structural maintenance of the home or apartment according to the lease. Additionally, they are the ones who can evict you for breaching your rental agreement.
Tenancies are contracts between you (and your fellow residents) and the landlord/owner. In exchange for letting you live in the unit, landlords and tenants will agree on a rent amount, lease term, rules, regulations, as well as your responsibilities concerning the apartment. In most cases, leasing is a written contract – although some leases are oral agreements.
24. Lease commencement date
Upon the official start date of the lease, the renter is granted permission to move into the facility. The tenant does not have to move in on this date.
Lessees are tenants, and lessors are landlords or owners who provide them with leases.
In the event a debt is not paid, a landlord may retain possession of the renter’s property.
An arbitrator will employ an impartial third party to dispel disagreements between you and your landlord through a formal (and usually legal) arbitration process. If your lease stipulates when and how mediation is to be conducted, it may also state who will mediate.
28. Mixed-use zoning
The mixed-use zoning of a residential area includes residential and/or retail and office space. Rental and living spaces will be located in certain parts of the building, while commercial spaces will be located in other parts. There is usually retail/office space on the ground floor, and residences on the upper floors.
Rent that is automatically renewed every month (as opposed to every year or some other duration) until terminated by either party within the duration of the lease.
30. Notice to quit
The landlord gives the tenant a formal notice that they intend to end the lease and begin the eviction process. There might be some reason why the violation needs to be corrected, such as a rent arrears or an illegal boarder being removed.
31. Notice to vacate
Tenants can give landlords a notice that they intend not to renew their lease in order to end occupancy of the premises. If you wish to terminate your lease, you usually have a window of time during which you can do this without penalty.
32. Parking ratio
It refers to the number of parking spots per unit or tenant.
33. Pet deposit
An animal deposit is usually a one-time fee required by the rental complex in order to allow pets to live there. Repairs will be covered by this fee if the pet damages the apartment or other parts of the complex. The monthly rental fee does not include a pet fee, which could be an additional charge.
Practices and patterns that exclude, ignore or restrict potential tenants due to their race, ethnicity, or another protected status, such as disability or religion, often using deceptive or surreptitious means.
The rent for the first and last months of a lease when the first and last month is less than one full month. Typically, if you move in the middle of the month, the landlord will only charge you for the percentage of the month you actually occupied the unit.
36. Quiet enjoyment
Usually found in leases, this term means you have a right to use your apartment peacefully and pleasantly within acceptable standards. The basic right to not be bugged by your landlord every day or having your lawn mowed at 4 in the morning is protected.
Tenants have the option to remain in their home after the lease term has ended. You may be able to renew for the original term or convert to a month-to-month arrangement.
The lease stipulates the amount you and your landlord will pay to live in the apartment on a regular, consistent, recurring basis (usually monthly).
39. Rent control
There are several cities and towns in California, New York, New Jersey, Maryland, and Washington, D.C. that have rent control laws with limits on how much a landlord can charge.
This is the reason some cities, most notably New York City (think “Friends”), have cheap apartments that are usually exorbitantly-priced, but are occupied by tenants who have lived there for decades.
Shared housing is simply living together in the same room or apartment. Roommates aren’t defined by law. They could be co-tenants, boarders, sub-letters, or significant others.
Potential landlords conduct such a background check to see if you have the right financial and legal background to be approved as a tenant.
42. Security deposit
When you sign your lease or move in, you provide your landlord with a security deposit that covers any damage you might do to the apartment during your lease term or any rent you don’t pay. Your landlord holds this money in escrow until you vacate the apartment.
If your landlord decides to charge you for damage or repair of your apartment beyond normal wear and tear, your deposit will be returned less any charges. The majority of landlords, however, are currently using an insurance-based system that is cheaper and more flexible.
43. Step-up lease
During the term of the agreement, the rent price may be raised at specified periods of time.
Renters may rent part of or all of their apartments. You can rent out a single extra bedroom in your apartment or the entire place (either for a profit or because you’ll be away for an extended period).
Subletting is not permitted without the permission of your landlord, and you, as the primary lease holder, are ultimately responsible for ensuring that the rent hits your landlord and reporting any damages caused by your sublet.
Someone who pays rent for accommodation in a unit or home owned by another person or entity. Sub-letters and boarders are not considered tenants.
Your lease specifies the period of time during which you will occupy the home and pay rent. A year can usually be considered, but it can also be an unspecified period.
The agreement between you and the landlord can be terminated by either party, for whatever reason. All types of rental agreements can be terminated by either party by eviction, non-renewal, or vacating for cause.
These are other expenses in your home that you’re responsible for and that are billed consistently and recurringly, sometimes based on your usage. Utilities can include cable, heat, water, electricity, internet, garbage removal, storage, parking, natural gas, rental insurance, grill propane and sewer.
Rent may cover some of these expenses. In case you don’t know, these are bills that are ordinarily split equally between roommates.
49. Vacancy rate
The percentage of units available for rent that are vacant.
50. Wear and tear
Typically found in leases, this term refers to how much damage is acceptable before a monetary penalty is deducted from your security deposit. This takes the burden of responsibility away from the tenant for normal, unavoidable usage deterioration.
Damage to cabinets such as chips and scuffs are often considered acceptable or normal wear and tear, as are painting and carpet cleaning.
Knowing rental terms before you sign up
It is important to understand rental terms as well as laws when looking for a rental property, so that you can sign your lease with confidence – and enjoy your new home to the fullest extent possible.