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Home: Renting an Apartment

Provided by Visa, Content Partner for the SME Toolkit

While it doesn't offer any investment potential, renting an apartment is the wisest financial choice for many people. Some may be saving for a down payment on a home, others may be unable to afford buying a home. For families or individuals who move often or for those not interested in the maintenance and repair of a home, renting can offer freedom to relocate and some relief from the costs of home ownership. No matter why an individual is renting, it's a great idea to know about the financial and legal aspects.


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.


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.

Tenants' and Landlords' Responsibilities

Before we talk about what the landlord is responsible for, let's take a look at your responsibilities:

  • Keep the apartment clean.
  • Put out garbage in proper containers.
  • Use electrical and plumbing fixtures properly.
  • Follow local housing, health and safety rules.
  • Do not damage the landlord's property or disturb neighbors.
  • Make sure guests do not destroy the landlord's property or disturb other residents.
  • Use appliances with care.
  • Notify the landlord when repairs are needed.

Renting is a two-way street. Since you are required to keep up your end of the bargain, the landlord has certain responsibilities, as well:

  • Obey all health and safety laws and regulations.
  • Make all repairs needed to maintain the property in good condition.
  • Keep all common areas safe, clean and in good repair.
  • Maintain all electrical, plumbing, heating and air conditioning fixtures and applications that the landlord provides or is required to provide.
  • Provide and maintain garbage cans and provide for trash removal where there are four or more units in the building.
  • Supply running water and enough hot water and heat at all times, unless there are separate heating or hot water units for each dwelling unit and the utility fees for the heating and hot water are paid directly by the tenant to a public utility company.
  • Give at least 24 hours notice to a tenant before trying to enter his or her apartment and enter only at reasonable times unless there is an emergency.
  • Do not abuse the right to enter.

There are certain actions your landlord is not allowed to take, no matter what the situation. A landlord cannot shut off utilities, take anything that belongs to a tenant, change the locks or otherwise lock a tenant out of his or her apartment to force the tenant to pay rent or leave the apartment. A landlord also cannot raise the rent or threaten to evict a tenant for taking legal action against the landlord. A landlord is not permitted to abuse the right to enter the apartment, meaning that the landlord is not allowed to harass a tenant with repeated visits.

Renter's Insurance

Renter's insurance is a necessity. You are responsible for insuring your belongings. Get renter's insurance as soon as you move into your apartment. 

Renter's insurance will insure all of your property within your apartment. Some policies will also cover your property when it's outside of your apartment. 

There are limits on reimbursement for expensive items. If you have computer or stereo equipment or costly jewelry, you may want to insure those separately. If you have items of great sentimental value, they obviously can't be replaced and you should put them in a safe deposit box.

Your insurance should also cover personal liability. Most renter's insurance policies will cover all non-auto accidents, including accidents that happen away from your apartment. 

As soon as you obtain renter's insurance, document your belongings. Make a videotape of everything you own or photos of everything you would want replaced. If you can't do that, write a detailed list of your things. If you lose your belongings in a fire it will be nearly impossible to remember everything you had. A record of your things will be invaluable in settling claims with the insurance company.

Keep your tapes, photos or written list somewhere outside of your apartment - at a friend's residence or with a relative. If you have a fire, you don't want these records destroyed as well.

Security Deposit and Eviction

Landlords may require a security deposit that will be used to cover any unpaid rent or damages you cause. This money must be refunded at the end of the rental agreement. The landlord, however, may deduct the cost of any repairs that he or she has to make, other than maintenance from normal wear and tear. Any charges deducted from the security deposit must be listed separately and sent with the remainder of the deposit. 

Hopefully your rental experience will not include an eviction. But if you don't pay your rent, don't live up to your end of the lease agreement or refuse to leave at the end of the lease, your landlord may evict you.

The landlord must serve you a written eviction notice. After a few days, the landlord can file that eviction notice in court. If the landlord wins his suit for eviction, and you still don't vacate, the landlord can ask a local law enforcement officer to remove you from the apartment.


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