Getting started as a landlord can be intimidating as you navigate maintaining a rental property while working with individual tenants. There’s also enough new terminology to make anyone’s head spin! Read on for the definitions of twenty common real estate expressions to get you started.
Abatement is a lease term or legal provision allowing a tenant to pay reduced or zero rent while a rental unit is uninhabitable due to damage, construction, a government evacuation, or other circumstances.
Abandonment occurs when a tenant leaves the property and fails to pay rent for a minimum period.
Arrears refer to the overdue rent a tenant owes, often due to financial struggles or withholding rent due to unrepaired damage or another dispute.
Co-signer designates someone who doesn’t plan to live in the unit but signs a lease and takes on the same legal responsibilities as a tenant. Tenants typically use a co-signer when they lack the financial stability to sign independently.
Co-tenants are when two or more people rent a unit together, each signing and agreeing to take on the legal responsibilities of the lease.
Eviction is a formal process for terminating a lease early and removing the tenant due to the tenant’s breach of the rental agreement.
Fair Housing Act is a federal law prohibiting landlords from discriminating against tenants based on race, color, national origin, religion, sex, familial status, or disability.
A fixed-term lease is a lease in which the tenant agrees to rent the unit for a specified time, often 12 months.
The Grace Period is the timeframe after a rental payment’s due date, during which a tenant can still pay without penalty.
A guarantor is someone who signs a lease to vouch for the tenant financially. A guarantor is like a co-signer but does not assume additional legal responsibilities.
Holdover Tenant designates a tenant who remains in a unit beyond the term of the rental agreement.
The lessor and lessee are the owner of a rental property (lessor) and a tenant who rents the unit (lessee).
Month-to-month leases allow a tenant to rent a unit for one month at a time until the landlord or tenant gives sufficient termination notice.
Occupancy Limit sets the maximum number of people allowed to live in a rental unit, sometimes determined by federal or local health and safety standards.
Renters Insurance is an insurance policy maintained by a tenant that protects against damaged personal property, liability for an injury within the unit, and other risks.
Security Deposit: a one-time additional rental payment that the landlord returns to the tenant at the end of the lease unless the tenant leaves major damage or owes unpaid rent.
Sublease: when a tenant rents out a portion or the entirety of his unit to another tenant.
Termination ends a rental agreement due to failure to renew the lease, eviction, or other circumstances.
Turnover Rate indicates the rate at which tenants vacate a rental property, requiring the landlord to clean and repair the unit before securing a new tenant.
Wear and Tear refers to minimal damage to a rental property resulting from ordinary use, such as worn carpets or faded paint.
Familiarity with standard real estate terms will help enhance your professional image and help you better understand lease agreements and the rental market. And since knowledge is powerful, your improved knowledge will polish your business dealings and protect your investment’s future value.
About Rentals America
Rentals America provides full-service property management for residential rental properties. Our team is completely dedicated to property management, and we’re here to help landlords navigate the rental market.
