renters Insurance Article

5 Things to Know Before Renting

A friend of mine, who’s unfortunately getting a divorce, has been looking for a home to rent. She’s never rented before, and when combined with the fact that things have drastically changed just within the last decade, she’s not so ‘up to date’ with the renting process.

Eventually she found what seemed to be the perfect place. She was surprised renting wasn’t an easy as she had thought it would be, and when she asked me about normal rental ‘protocol’ these days, she said the famous last words of many ill-fated renters:

“But it’s not like I’m buying the place.”

Obviously buying a home usually takes more work than renting. However, renting isn’t as easy as security deposits and having electricity switched into your name. Before you sign any lease, realize it CAN be ‘like you’re buying the place’ and that there a few important things to remember.

1.) Verbal statements are not binding.

One would think that after seeing this phrase so commonly in terms and conditions that we’d take it more seriously and take it at face value.

Before you hand over money to anyone, clear terms and conditions should be drawn up and you should get receipts. If you’re paying a security deposit to ‘hold’ a place, it should be in writing as to whether it’s refundable, how long it will be held, and whether it accrues interest.

Assume your lease says rent is due on the 1st by 5PM but your landlord says it’s okay to pay by the 15th of every month. You need to do one of two things. Either pay your rent on the 1st by 5PM or have your landlord amend the lease confirming that. Otherwise, it’s your word against his (even if he writes a receipt—that doesn’t indicate an amendment to the lease) and in states like Virginia, a landlord friendly state, that’s crucial when he decides to file a warrant in debt on the 6th saying you haven’t paid rent. When you tell the court he told you otherwise, it means nothing and you could end up paying for it and getting evicted with a bad reference. As they say, words are cheap.

2.) Sign It Like You Mean it

Here’s where that dangerous phrase some renters use can be fatal and end up following them a lifetime—it’s not like you’re buying the place, but you’re still making a commitment to it.

Just because you’re ‘only renting’ doesn’t mean you can jump ship. Your lease may state that if you abandon the property or are evicted before your lease term is up, you may be held responsible for all costs associated with re-renting the apartment, maintenance costs, all utility and you may have to pay rent as if you still live there for the remainder of the lease. Bottom line– you’re NOT buying it, but you still have a commitment to a legally binding contract.

3.) Your Landlord (and neighbors) Most Likely Won’t Pay For YOUR Damaged Property—No Matter What

About a decade ago many landlords started requiring proof of renters insurance. This is because they don’t want to be held responsible if a pizza guy falls on the bike you left on the sidewalk, and they really don’t want to be responsible for your personal property (ie furniture, clothing, home décor) if there was a total loss—particularly if something like a fire originated in your apartment, wiping out ten other neighbors’ property as well. The liability portion of renters insurance pays if others sue you because you started a fire (accident or not) and the personal property amount covers YOUR belongings.

But what if your next door neighbor starts a fire and your whole building burns down?

You should hope the liable party has renters insurance so you can make a claim under their liability for your belongings. Without renters insurance (from you or a liable neighbor), you’re on your own. Having a landlord replace everyone’s belongings is practically unheard of. Renters insurance does help protect you if you’re found liable for anything that caused damage to someone else’s home or belongings, and if that happened, you could use your policy’s personal property coverage to replace your belongings simultaneously. If you’re going to rent, you need renters insurance as badly as homeowners need homeowners insurance for many reasons.

4.) Sight Unseen

Hindsight is 20/20—especially when renting “sight unseen.” If you’ve signed a lease and waiver stating you’re renting without seeing the property, you have to be prepared that you could be charged for damages you didn’t do after you move out. If you’re able to see the rental, make note of the damages WHILE the landlord is with you. It’s best to video tape the walkthrough to avoid future conflicts. Document damages in every possible way—have the landlord include them in the lease, marking them as pre-existing, or as promising to fix them so you don’t have to lose your security deposit or be charged extra fees. If you have no choice but to rent sight unseen, cross your fingers.

5.) You Can Still Negotiate

There are many people who don’t realize they can negotiate when renting. You may not be buying it, but you can still request negotiations as you would when buying a home. You can try to negotiate rent amount, lease terms, new appliances, leaving damage as is and telling the landlord you’ll fix it if it’s taken off your rent, painting, repairing damages, and more.

Of course, the trick is to be on your best behavior from moment one. Always be polite, professional, direct, and respectful. Usually this earns reciprocation, especially on properties that aren’t renting when the landlord is desperate to get a tenant. Just like buying a home or making any other sale, you can ask for things you’d like and propose ideas. Technically, it is where YOU want to live and you have every right to give it a shot. Don’t strong arm landlords though—odds are there’s going to be at least one qualified applicant who will think the place is the Taj Mahal.

Follow Desiree on Twitter @DesireeBaughman.

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