Rental lease agreements between landlords and tenants outline each party’s responsibilities and have a duration length. Tenants may rent an apartment for a month, half a year, a year, or longer. During the touring process, a real estate agent typically discloses how long the landlord wishes to sign a lease, and renters can attempt to negotiate the lease length. Prospective tenants must determine how long of a lease they wish to sign to ensure they find their ideal match. Landlords and tenants may each have their reasons for wishing to sign or avoid a multi-year lease agreement.
How Long are Leases for Apartments?
A standard lease lasts for twelve months, and this is common across most rental markets nationwide. One year is the standard length for a typical lease, as this allows landlords to revisit the agreement in year-long intervals to either get tenants to move out or increase the rent. From a tenant’s side, one year is an appropriate amount of time to turn the apartment into a comfortable living situation and still move to another apartment if the situation does not work out.
Month to Month vs. Yearly Lease
While leases are not flexible once they are signed, the lease duration period can change depending on the landlord’s or tenants’ wishes. Prospective renters can negotiate a lease duration to be shorter or longer than twelve months. Some landlords may also offer a month-to-month lease, allowing both parties to move on in a shorter timeline.
In most cases, renters will have more success negotiating for a longer lease than a shorter agreement, as landlords do not want to turn the apartment over in a smaller timeline than they originally anticipated.
Why Would a Landlord Offer a Longer Lease?
Whenever a tenant’s lease expires and they move out of their apartment, the landlord is responsible for filling their vacant unit. This can be time-consuming and expensive, especially if the real estate market is in poor shape. The landlord will have to advertise the unit, arrange showings, sort through tenant applications, draw up new lease agreements, and then clean and repaint the unit to make it presentable. All the while, they will simultaneously be losing income from the rental unit as it sits unoccupied. Longer leases allow landlords to avoid this yearly inconvenience and its associated expenses.
Until the mid-1800s, nearly every residential lease in New York City expired simultaneously on May 1st of each year. Today, lease expirations are far more spread out but still heavily concentrated in the summer months. Landlords generally prefer that tenants’ leases end between May and October in order to take advantage of the booming market of summer renters looking for a new home. Thus, if you’re starting a new lease beginning in the winter, it’s not uncommon for landlords to request a sixteen- to eighteen-month lease ending in the summer.
Finally, if a landlord already has a desirable tenant who reliably pays rent on time, receives no complaints from neighbors, and makes relatively few maintenance requests, the landlord may wonder where they should give a multi-year tenant lease for a longer period rather than risk taking on an unknown tenant for their next rental period.
Benefits of Signing a Longer Lease
Renters may want to sign a lease for over twelve months and can ask their landlord to do so. The following reasons could impact a renter’s desire to sign a longer lease:
Costs of Moving
Moving out tends to be a much bigger hassle and greater expense for tenants than it is for landlords. If you’re moving from a smaller apartment to another smaller apartment within the same neighborhood (say, from one Bushwick studio to another), you’ll still have to front the upfront costs of moving, which potentially includes a broker fee. Signing a multi-year lease will offer you a reprieve from the time commitment and financial burden of moving.
Moving Pains
No matter how many tours you take and how much research you do beforehand, moving into a new apartment comes with a lot of unknowns. You may not discover that your upstairs neighbor is a blossoming artist with a late-night rehearsal routine until your first night in your new bedroom. If you are happy in your current lodgings, a two-year lease can be a good way to maintain the status quo and avoid any unpleasant surprises in your living situation.
There are also emotional tolls associated with relocating. While some find learning to navigate a new neighborhood thrilling, many renters enjoy memorizing their favorite train routes and knowing which bodega on the block offers the most delicious coffee or the cheapest sandwiches. This is especially true for families with children, where moving might mean enrolling in a new school district and losing touch with their neighborhood friends. When you have set down strong roots in your immediate neighborhood, a longer lease can provide a comforting sense of stability.
Negotiating Point
Savvy renters who wish to acquire something else out of their lease may offer a longer duration as a bargaining chip. Since landlords often prefer longer leases, renters can leverage this to try and negotiate a lower rent, a parking space, or other appealing features. Depending on the time of year and the rental market, some landlords may accept a longer lease in exchange for a concession of several months free.
Lock in the Current Rent
Rent hikes during yearly renewals can be excruciatingly expensive and sometimes may force renters out of their current apartments. A longer lease means knowing exactly what you will be paying in rent for the next several years, which can help provide financial peace of mind. Having a locked-in rental rate can also end up saving you a lot of money if the market value of your apartment skyrockets during your residency. Tenants who signed multi-year leases during the pandemic were able to reap the benefits this year as average rent prices drastically increased in the following years.
Drawbacks to Signing a Longer Lease
While longer leases can be appealing to renters, some may wish to have a shorter lease due to the following limitations:
Miss Out on Future Deals
Unfortunately, the financial implications of signing a longer lease depend on the state of the real estate market. If the market value of your apartment decreases while you are a tenant, you are contractually bound to continue paying the rent outlined in your agreement and will not be able to take advantage of any rent decreases your landlord might otherwise have offered.
Renters in high-density cities witnessed this problem first-hand in 2020. Those who signed multi-year leases before the pandemic paid more rent for the following months when the market rate drastically decreased. However, it is worth noting that the market rent generally increases in most cities, and extenuating circumstances are more rare than general projections. Renters can pay attention to the market conditions, but markets are always subject to unpredictable dips.
Limited Flexibility
Perhaps the greatest downside to signing a long-term lease is that it greatly limits your flexibility. If you fall out of love with your apartment over your first year, you’ll have little choice but to stick it out and stay put. Even if the apartment is ideal, your life circumstances could change unexpectedly. A two-year lease on a fifth-story walkup could prove difficult if you suffer a long-term injury or welcome a new child to your family and have to carry a stroller. If you’re offered an appealing new job in a far-off part of the city, you could be stuck with an unpleasant and potentially draining commute for your lease. Even worse, you might unexpectedly be laid off from your job entirely and be contractually bound to an apartment you can no longer afford.
Break Your Lease
When your life circumstances dramatically change, or you suddenly lose income, your rent agreement may no longer make sense. Some renters may break their lease and move to a more affordable apartment, or a unit in a new city where they need to relocate.
Breaking a lease is a serious rental action that can have repercussions. You can lose your security deposit and still pay several months of missed rent. Additionally, your landlord could sue you, resulting in more legal fees. Breaking your lease can also affect your credit score and relationship with your landlord, directly impacting your ability to rent another apartment.
To best protect your interests, it’s definitely worth discussing if your landlord would be willing to include an “opt-out” or early termination clause in the lease terms to minimize the potential penalties in the case that you need to move out early for any reason. This could potentially offer you the best of both worlds: the security of a long-term lease and the flexibility to move if your circumstances require it.
Conclusion
Renters and landlords can benefit from signing a longer lease. Renters can secure a lower rent, negotiate for another amenity or free rent, and give themselves the relief of knowing they will not have to move in the near future. Landlords appreciate longer leases because they limit their vacancies and keep the money rolling in. When debating whether to sign a longer lease, future tenants should consider their life circumstances and ensure the new apartment fits their plans for the coming years.
