RELOCATION: Although some expats will end up buying a property when they relocate to New Jersey most will end up renting, at least to begin with. When you rent a house or apartment here, you will usually be asked to sign a rental lease agreement. Rental leases are usually setup to run for a minimum of one year, so make sure when you are deciding on a home that it is good choice for your needs.
A rental lease agreement in NJ will often be based on a very standard form of contract. The most common one that realtors use was developed by the New Jersey Association of Realtors, shown below. Sometimes landlords may use their own preferred formats for a lease. Most of these though will usually set out very similar basic principles. Some of the details of the terms may differ from property to property depending on the landlord.
As a renter myself, it seems to me that this standard agreement is structured more towards benefitting the landlord than tenants. I am probably biassed but there are certain basic rights that tenants still have here. These are set out clearly in the New Jersey Tenants Rights Handbook. A copy of this should be provided by the realtor or agent who leases the property to you. The handbook contents are also available here online.
What to look for in a Rental Lease Agreement in NJ:
1. How much money is required up front?
There are three different payments that are mentioned in the standard lease:
(I) You will be required to pay upfront an initial security deposit which is usually 1.5months rent for houses, and some condominiums or apartments. For other apartments, the deposit may just be 1 month’s rent. This deposit is legally required to be placed in a bank account by the landlord. He/she should provide details of this to the tenant. This notification may be done via the lease, and if not, then the landlord should provide you with a copy of the actual account where your security deposit has been placed. The security deposit is kept as an assurance against any unpaid rent or unpaid/unrepaired damages that occur during the lease.
(2) Another upfront payments is the first month’s rent or a portion of it. Since the standard requirement is one month rent ahead, any requests for more than this e.g. six month’s rent etc., should be viewed very suspiciously. On occasions a landlord may ask for two month’s rent because he is concerned about you as a credit risk. This is a bit unusual and can be challenged but the landlord has the final say on who gets the apartment. Anything more than this though might well be a scam, so be careful.
(3) It is standard for the incoming tenant to pay the realtor’s commission (if this is relevant). If so, this will be one month’s rent, which will often be split with the landlord’s realtor, and the payment of these will be spelt out in the lease. For apartments that are owned or managed by a property company, there may not be any realtor’s involved, so it will not be included.
2. Check normal wear and tear
Most leases will describe damages that the tenant is responsible for as anything beyond normal wear and tear to the property. Firstly check that there is such an allowance in the lease contract. Get agreement from the landlord about what damage exists in the property before you move in. Take note of any issues that need fixing before your move-in date. It is a good idea to photograph the premises before your movers come in, so there is a record (with date marked photos) of the property’s state before any damage occurs that you can be held responsible for. If there is something you miss up front, draw the landlord’s notice to it as soon as possible. Don’t wait till the lease expires and memories are vague about what was there earlier. This can make getting your security deposit refund harder than necessary.
3. What are tenant responsibilities
Many landlords will make tenants responsible for snow removal and gardening care costs. If snow accumulation during winter is minor, it may only require some shoveling for yourself and family. This is likely when there is a relatively small area requiring clearing. Actually we enjoyed this part a lot and it can be kind of fun! However, if the property has a very long driveway or extensive paths and concreted areas that are too much work for the tenants to clear themselves, and snow removal by a third party is required, then most likely the tenants are expected to pay . Many properties in New Jersey outsource gardening & maintenance tasks to third parties. If this is an ongoing cost for the property, then the landlord may expect you to pick up the cost. This may be negotiable or perhaps you can offer to do it yourself.
Standard utility costs can include extras such as garbage removal and sewerage, that the tenant is expected to pay. These are usually in addition to the more common utility costs for electricity, gas and water (including hot water). Check which ones are to be paid by landlord or by tenant in the lease. These should be clearly identified. Make sure you understand what these costs are when you sign the lease, in case they are too high for you to pay. Although it may be uncommon, there is always the possibility of negotiating costs with the landlord.
Some repairs are also expected to be paid by tenants. This varies, depending on the landlord. However, some will ask that the tenants contribute towards things such as mechanical, wear and tear repairs. For example you may be asked to contribute the first $100 or $200 towards a bathroom repair, where the need for repair is due to the tenants’ regular use.
4. Do they allow pets?
Most rentals do not allow pets but if they do, they may ask for Pet Insurance cover to be taken out to cover any damage caused by them. Due to the winter weather in New Jersey, most cats and dogs spend a lot of time indoors, so damage is a possibility in some cases. This may be included in the lease.
5. Renters Insurance
All leases in NJ these days will include a clause about renter’s insurance. This is compulsory insurance that the tenant must get to underwrite their goods against damage due to any number of causes. The landlord is not considered accountable for replacement of any tenant’s goods normally. The lease will often require the tenant to provide a copy of the policy, as part of the lease execution. This insurance is available from most large insurance companies including Geico, Progressive, Allstate and State Farm.
6. What are the lease renewal and extension requirements?
In New Jersey, often the landlord will send a notice 30-90 days prior to lease expiry, enquiring whether the lease is to be renewed or not. This action is usually spelled out in standard leases. It will usually set down what time period ahead of the lease finish that the tenant is given to accept the lease renewal, including any changes to the lease terms. This is done to give the landlord some notice if the tenants are thinking of moving out as well as communicating any changes to a renewed lease such as rent increases or changed lease conditions.
Failure of the tenant to provide acceptance of the lease by the set period, would normally result in the tenant having to move out at the end of the lease. The 30- 90 day notice however, doesn’t seem to be implemented by all landlords. In some cases, the lease is so worded that a lack of lease renewal means the lease moving to a month-by-month tenancy. Whatever the terms are, read the lease provisions carefully to be certain about what the lease renewal/or lack of it means. It can be confusing and poor communication here can lead to problems in the landlord-tenant relationship.
Most people do not seek legal assistance reviewing rental leases. However, if ever there was a country where lawyers are brought in to dispute things in the flick of an eye, it’s the USA. So it may be worth having an attorney look through your lease if you have any concerns or questions. While realtors can often give very good explanations of most lease terms, if the wording is too difficult to understand or there is a lack of clarity about costs or other significant issue, seek professional help.
Watch out For Scams
Also be careful if you are reviewing rental properties from popular classified advertising websites or sub-letting advertisements. While these can be very useful, some people who are advertising their properties here, can be less professional in their dealings with tenants or even complete charlatans. Scammers in New York City for instance, have been known to lease or sublet apartments that they didn’t actually own by pretending to be sub-letting tenants and landlords.
So be on your guard and evaluate the property and the potential landlord or subletting person critically. Look for any signs that might indicate anything suspicious and review the lease carefully before actually signing. If it sounds too good to be true, then it probably is. When there is no professional vetting such as realtors or realty offices involved, it pays to be extra careful. Don’t be pushed into signing up for something that you have doubts about-there will always be other rental opportunities on the market somewhere else.
NB: This is intended as general information only. All people intending to sign a lease should examine the specific lease details that are applicable to the property they are renting and seek appropriate professional advice.
What’s your experience been with rental property leases in NJ?