Shopping for a rental property can be downright exhausting, but—unfortunately–the work isn't over once you think you've found a keeper. Before you sign a lease or put any money down, you need to do your due diligence to ensure you will be legally protected in the transaction. Though it may be tedious, that includes researching the property owner and reading the fine print. Here, two attorneys with real estate and tenant law experience share their insights about seven potential red flags to clear before you sign on the dotted line.
1. The owner is being foreclosed.
Sometimes, the owner of a property that's in foreclosure may continue to rent it to unsuspecting tenants. Landlords in these situations sometimes take the first and last month's rent and security deposit while the tenant's ejected from the property by authority through a "writ of possession," says Alan Schwartzseid, an attorney with Clayton & McCulloh, P.A., in Maitland, Florida. Though it might sound outlandish, it's happened enough over the years that you might not have as much legal recourse as you'd think. "Judges have come to be less sympathetic to tenants who don't do their due diligence and end up in these circumstances over the last few years," Schwartzseid says.
Before you sign a lease: Check public records for the county where the rental is located for a lis pendens filed against the owner. This legal document declares that a lawsuit is pending against the property and that the owner is being foreclosing. If there is a pending lawsuit, do not sign the lease or contact your attorney to see if you can negotiate for a cheaper rent. "Plenty of month-to-month tenants rent this way, especially after a community association forecloses," Schwartzseid says.
2. The lease mentions mold.
While it sounds gross, mold could be more than just a nuisance—certain strains can cause major health problems. And for those who live in warm-weather locales, the heat and moisture can make even innocuous strains of mold grow into an unsightly problem quickly.
Before you sign a lease: Make sure there is no mold remediation waiver attached or a mold remediation clause in the lease. "Never agree to that," says Isaac C. Spragg, an attorney with Spragg Law Firm in Miami, Florida. "The place probably has a history of mold issues."
3. You can't visit the property before signing the lease.
If a landlord won't allow you to view the rental before you sign the lease, that's a major red flag. "An owner or manager who precludes the tenant from seeing the property could be hiding damage that could be meaningful to you, but not enough to get you out of the lease," Schwartzseid says. The unseen unit could hold a horrendous paint job, stains all over the place, bad smells, or other unsightly nuisances.
Once you sign the lease, you're obligated to comply with its terms unless the property the landlord provides is not as described in the lease or some other issue detailed in the lease or in local ordinances permits you to walk away, he says.
Before you sign the lease: This one's pretty easy—demand to see the property before signing the lease. If you're moving in from out of state, send someone on your behalf. If the landlord refuses, find another apartment.
4. The landlord lives out of state or overseas.
If the owner of the property doesn't live in your state, it could complicate matters if legal issues arise, Spragg says.
Before you sign the lease: If the landlord lives overseas or out of state, make sure the lease is with a local property management company or property manager who can serve on behalf in your state if legal issues arise.
5. The landlord won't specify who's responsible for costs.
When it comes to paying for or repairing certain items in a rental–appliances, fixtures, utilities, extermination services, etc.–it should be clear from the get-go who is responsible. For example, in Florida, the state bar offers a residential lease form that clearly delineates what the landlord will pay for and what the tenant will pay for, Schwartzseid says. "It also states limitations on what the tenant must spend out-of-pocket for major maintenance or repairs of items listed as the tenant's responsibility."
So, if your potential landlord won't disclose this information or says you'll simply figure it out later, he may be looking to stick you with the bill.
Before you sign the lease: Add language that makes it clear who is responsible for what costs.
6. The landlord doesn't provide a damage checklist.
When you do a walk-through of a rental before signing a lease and moving in, it's imperative to complete a checklist to annotate any current damage to the property, Spragg says. Otherwise, the landlord could later turn around and blame you for these issues – and require you to pay to fix them.
Before you sign the lease: Ask for a damage checklist to be filed and verified by both parties.
7. The landlord asks you to wire money or pay cash.
If the landlord wants you to wire them money or pay in cash for your security deposit or anything else, it's a huge red flag. "Transferring by wire or paying cash is never a good idea," Spragg says. "It is not the normal business practice, it is unnecessary, and it is common practice of scammers."
Before you sign the lease: Confirm the landlord owns the property, that your real estate agents are certified, and that the property management company is reputable. Ask if you can pay in a more established method, such as certified check. If not, do not sign the lease.