All you need to consider before signing a tenancy agreement All you need to consider before signing a tenancy agreement

All you need to consider before signing a tenancy agreement

Leaving aside obvious issues like the monthly costs and which utilities are included, there are other things to take into consideration before signing a lease. Take your time to read the fine print! 

The more you can agree with your landlord by written, the better protected you’ll be against any surprises or upsets once the lease starts. A rental experience can be stressful, but if you prevent some aspects, you can even enjoy this process. 

First of all, you need to agree with your landlord which will be the lease term, and how the renewal process would be like if you decided to extend your stay in his place. For example, ask when you should notify them about your intentions and if there'd be any changes to your security deposit. 

Speaking of which, it should be written down that your security deposit will be returned if you leave the unit in the same good condition that it had been in when you moved in. Read carefully the general rules of security deposits so you know what you should expect when ending the lease. 

In some cases, unexpected situations can occur and you could decide to break the lease early. You may be transferred to another city, you may move out to your friend's home, or any other scenario that forces you to leave early. The lease should consider this option and the penalties that come with it. 

Other aspects to take into account are how and when you should make your rent payments. You need to know this beforehand in order to use the best payment method, which can even help you to save money on rent. The same applies to when the rent’s due: you could match it with your payday to avoid making cash advances. Try to fix a flexible rent due-date for the first week of the month, for example.

Last, but not least, take a good look at the unit's rules. See if there are any specific rules around guests and meeting schedules. In the same way, if you've got a pet or you're planning to adopt one, check if there is any pet policy. In some cases, leases are suspended at the very last moment because of rules that may not match with the tenant's lifestyle.

Information that landlords don't need  

When you're renting a house, you must give its owner certain data about your finances. But there are other kinds of personal information that you can keep for yourself.

Now that you've found a nice place to live in the neighborhood that you like and that it's under your budget, it's time to do the paperwork. The landlord is going to check out your financial management in order to know if you're going to pay on time. By digging into your bank account, your salary, your savings, and even your investments, they’ll set the price and the interest rate. You don’t need to worry if you’ve got a bad credit score, you can still rent an apartment!

There's some personal information that they shouldn't ask, because it corresponds to your private life, and they shouldn't make a difference in your suitability as a tenant. That's where you have the right to appeal to the Fair Housing Act.

According to it, it's against the law to ask questions regarding someone's nationality. This means that the landlord can’t ask you where you've born or where your spouse is from. This said, they can't ask for your race either. Penalties are severe for landlords that inquire about this information. 

Another aspect that belongs to your personal information is your sexual orientation. This is something that you can legally keep to yourself if you prefer to do so. It shouldn’t matter if renters are straight, gay, or bisexual, and if anybody asks, it's a violation of the law. 

An innocent question like “do you go to church?” is absolutely out of place. You may be Christian, Muslim, Jewish, or Atheist, but your religion doesn't make any difference when applying for rent.

Landlords shouldn’t mind if you’re married or if you've got children either. You can tell them about your family if you'd like. You may be in a situation when you need to ask, for example, whether there’s a school nearby. But they can't ask for further information in order to accept you as a tenant.

Did you know that there are cities where it's much cheaper to rent than to own a house

Cosigner: a role that shouldn't be taken lightly 

Typically young people who apply for a rental contract need a cosigner to share the commitment with. This is a requirement that creditors usually ask for when the applicant has bad credit or no credit at all

A cosigner is someone who has decent credit and is the banks' and landlords' backup in case the original signer doesn't make their payments on time. This said, if your friend doesn't have any regular income or a responsible attitude, the best advice is to deny your signature. If they fail to accept the given terms and conditions, you would have to afford the payments instead.

That will not only affect your budget but also your credit score, in a negative way. Your debt-to-income ratio will also increase. This means that the amount of money you'd owe is bigger than what you'd receive, which is a serious financial problem.

Check this article for the best 5 ways to rebuild your credit score!

If the person you cosigned for stops making payments, the responsibility for cleaning the debt will fall on your shoulders. Since the original borrower likely won’t have the credit necessary to consolidate or refinance the loan themselves, you can try to do this for them.

Provided that you succeed in the negotiation, your friend could get a lower, more affordable monthly payment. You can also try and help your friend to find ways to catch up on their payments. As a last resort, you can opt to pay off the debt yourself and terminate the contract earlier.

This is something you can choose yo do if you know the impact will be lower than letting your friend pay off their debt. However, this solution has a double disadvantage: you'll have an unexpected expense that will affect your savings, and you won't know when you'll get your money back. Your trust in your friend will play a critical role!

Knowing all these risks, take your time and think thoughtfully before cosigning a loan or a contract. If any of these scenarios appear, you'll not only lose some money and put your credit history in danger, but it'll surely also affect your relationship.

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