How to Read and Understand a Lease Agreement Correctly

Whether you’re a first-time or a long-time renter looking for a new home, the lease agreement is one of the most important documents you’ll encounter. Reading it correctly before you affix your signature can save you time, money and future grief.

What You Should Expect

Never expect that a lease agreement will be the same as any other lease you’ve signed in the past. No matter how many times you may have rented, or if you’ve owned a home before, no two leases are the same. Just when you think you’ve seen every conceivable provision, a new detail appears.

Leases specify more than just how long you’ll be living at an address or the dollar amount of your monthly rent. Most provide often-overlooked details such as use of common areas, security deposit amounts, occupancy restrictions and the landlord’s policy on replacing damaged items. A lease should also contain a termination clause detailing penalties for breaking a lease before it expires. A repair clause specifies rules between tenant and landlord with regards to who is responsible for paying when repairs are necessary.  

Other provisions you should expect to see include a right-of-entry clause and information on subletting. Regulations clauses list rules such as permissible noise levels at certain times of each day.

Lease Checklist

Many leases contain paragraph after paragraph of tiny type. When a lease can be incredibly long and convoluted, navigating such a complicated lease can be overwhelming. Rather than trying to tackle the document as a whole, approach it as you would a a lease agreement Checklist. Doing so organizes a way to ensure you don’t sign something that doesn’t meet your approval. Be sure to carefully review these six categories:

The Basics

Don’t take accuracy of essential information for granted. Is the address of the property correct? Does the lease specify by name who manages the property and their appropriate contact information? You should see the amounts for rent and any associated fee penalties for late payment. Beginning and ending rental dates must be clearly stated.

The document should specify any appliances furnished with the unit, such as a refrigerator or a dishwasher. Look for stated options to renew the lease, the policy regarding rent increases and what you have to do before vacating the property.

Fido and Fifi

The agreement needs to state whether pets are allowed or not. It should specify pet fees and limitations such as breed, weight limit, and number of animals permitted.

Maintenance and Alterations

Look for language stating that the landlord is responsible for completing and paying for repairs. If you plan on living in the residence for more than a short period, make sure the lease addresses allowable alterations such as changing paint colors. Look for phrasing that specifies move-out conditions for alterations: i.e. if you make alterations, are you responsible for restoring the unit to its move-in condition when you leave?

Utility Charges

Although some communities now furnish cable TV or Internet services, tenants are often responsible for paying the monthly costs. Some landlords pay for water, electricity, or gas. Make sure the lease stipulates for which services you are monetarily responsible for.


Are you likely to accept a job out of the area? Do you serve in the U.S. military? If your circumstances change you’ll need to know if the lease permits you to sublet and if you would incur any penalties for early departure. It should also state whether you or the leasing agent is responsible for finding a tenant for subletting.

Community Rules

These are the rules and policies regarding guests, use of clubhouses and extended tenant absences. Look for language about storage, maximum occupancy, and any tenant insurance requirements.

Knowing how to read a lease is crucial for a happy stay in a new home. Also, listen to what a landlord says. Ideally, prospective renters and the landlord will review the lease together. Make sure that what the property owner or the leasing agent states isn’t contradicted in the lease. If you suspect that it does, get the correct information in writing. This is the time when you should attempt to negotiate any terms you consider unsatisfactory. Finally, inspect the property and submit a written list of any damages or deficiencies before agreeing to make it your new home.