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Financial Literacy: Renting

Library resource providing financial literacy information

Renting

Lease Agreement by NY - http://nyphotographic.com/ Creative Commons 3 - CC BY-SA 3.0

Leases
A lease is a binding contract that lays out the conditions and responsibilities of a rental agreement, both for the owner and the renter. It stipulates the monthly rental price, payment due date, the length of the lease and what happens if one of you breaks the lease. A lease generally also outlines whether the renter or landlord will pay the utilities, whether pets are allowed, and any other restrictions and requirements the landlord wants to include.

Read your lease agreement very carefully before you sign it. You will be held accountable for knowing everything included in the lease. Also, keep a copy of the lease for your records. It may come in handy if you have a question about what you are or are not allowed to do.

Cosigning
If the landlord is not convinced that you will be able to make your payments, he or she may require you to get a cosigner. This is someone who will share financial responsibility for the lease. If for some reason you are unable to make the payments, the cosigner will then be responsible for making the payments.

Breaking a Lease
You should avoid breaking a lease by moving out before the end of the agreed term if at all possible. Each lease agreement has its own penalties for breaking the terms; some only require the payment of a penalty, but others require the renter to continue paying rent until the apartment is re-rented. For this reason, it's critical to check your lease and make sure you can handle the financial ramifications before you break your lease.

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