Since leasing relationships can last more than one year and different things can happen during this time it is important to understand all of your possible risks and legal consequences before signing a lease contract. To reduce your risks we suggest youto use the following verification questions. At that in order to significantly reduce the risks of Lessee and develop a legal position, it is higly recommended to contact with qualified leasing lawyer.
What is indicated in the subject of Lease Agreement?
If the subject of the contract contains incorrect information, you risk not only to pay extra amount of the rent (for example, if the amount of the lease depends on the area of the premises), but also you risk that the contract will be invalidated.
What is lease term?
Typically, the term of lease is not more than one year or a period starting from three years (in commercial real estate). But also there can be lease contract with monthly lease term, which gives significant flexibility for the tenant and the lessor in theier relations. Monthly rentals are ideal when you renting a dwelling in foreign city for a short time.
What restrictions are provided by the contract?
The lessor can limit the number of people who can live in a dwelling. The landlord can set certain hours of use of the premises (in commercial real estate).
What are the conditions of lease term prolongation? What are the consequences of the contract if you do not return the premises on time?
How many preliminary notifications about your decision on prolongation of the lease contract should you send to the Lessor? And in which term?
Will the lease term be automatically extended if you do not send a notice on time?
What sanctions are provided by the contract?
The lease contract may contain provisions about fixed penalty, which you will have to pay in case you violate the lease terms. Such penalty means that the lessor will not need to prove the actual amount of damage that was caused by you.
How are rental payment provisions formulated?
The provisions of the agreement about the amount of rent should be formulated very accurately and unambiguously. The disputes which can be arised due to the provisions with incorrect or ambiguous information may serve as the basis for invalidating the lease agreement. The provisions on the amount of rent along with the provisions on the subject of the contract are the significant conditions of the lease contract.
When the rent should be paid?
Do you have enough time to pay your rent after the due date?
What are the security deposit requirements?
Do you have the sublease right under a contract?
It is likely that the provisions of the lease agreement contain requirements for mandatory approval of the sublease by the lessor. Make sure that this provision also provides the condition that the lessor does not have the right to unreasonably refuse such approval.
Who pays for utility bills?
What are the conditions for repair and maintenance of the premises provided?
Insist on joint verification of physical condition of the premises before the conclusion of the lease contract. Make a list of such deficiencies in the premises in case of revealing them, and ask the landlord to sign it. Also coordinate with the lessor the terms during which the lessor agrees to eliminate such shortcomings. Otherwise, you will eliminate such shortcomings at your own expense.
Tip: do not rely on the lessor’s verbal promise not to apply the contractual sanctions to the lessee.