There are a number of reasons why a person, or family, would choose to lease a home or apartment rather than purchase one; this article addresses why it is better to sign a multi-year lease (where available) over a simple yearly or monthly agreement.
Longer leases usually come with lower monthly costs (e.g., $1800/month for 1-year or $1,500/month for 3-years), which provides two instantaneous benefits: (1) you spend less money over time, and (2) you have contractually stability for the next three years, allowing you to budget for your future. To the first point, landlords will always attempt to pass costs to their tenants; typically, this takes the form of higher rents. Having a contract in place makes it impossible for your landlord to pass the cost onto you.
While this is not to be construed as legal advice to break your lease early, most leases have what is known as a “liquidated damages clause,” which operates to set the damages in the event that a party breaches their contract. In essence, the agreement says that because damages are too difficult to figure out, the parties agree that the damages will be “X” (typically a month or two of rent). The person who signed the longer lease, in exchange for a lower monthly rent, is placed in less danger by these liquidated damages clauses. If a long-term leasee breaks their lease early, the landlord will try to argue that they are also entitled to the difference between the regular rental rate and the reduced rental rate ($300/month in our example above). However, the liquidated damages clause bars him from winning on that argument, and the “monthly rate” that most liquidated damages clauses utilize will be lower to boot.
At the Chernov Team we understand that knowledge is power and knowledge of the intricacies surrounding leasing is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.
Multi-Year Leases Place the Leasee in the Driver’s Seat
