Before You Sign on the Dotted Line

Tips for Signing Leases, Gym Contracts, Phone Agreements, and More


When Courtney, now 21, moved into her first apartment two years ago, not getting all the terms in writing turned into a $1,500 headache and a hard lesson in contract dos and don'ts.

When 19-year-old Courtney went looking for her first apartment in her hometown of Tucson, Ariz., one offer was too good to pass up. It was close to work and the first month was free. She signed a one-year lease and moved in.

The carpet was a wreck—worn thin and coming up in places, but the move-in flier promised new carpet as needed, and the property manager agreed that hers qualified.

When Courtney asked about the carpet after moving in, she found out that the original manager had been let go, the fliers were gone, and there was nothing in the lease about new carpet.

Courtney soon discovered the problem was worse than she thought.

“I saw this giant roach crawl out from under the carpet where it was coming away from the walls,” she says, “and when I lifted it up, there were dead roaches and roach skins everywhere.”

After weeks of trying to get the carpet replaced and the apartment sprayed for bugs, Courtney decided that she had to move out. She broke her lease and found herself on the hook for almost $1,500—including paying for that “first month free” that she was promised when she moved in.

Looking back, she says she never would have rented that apartment with the carpet as it was, but the manager had made her a verbal promise. Not getting that part of the agreement in writing turned out to be an expensive lesson in things to consider before signing a legal contract.

10 Contract Guidelines: Dos and Don’ts

Every contract is different, but they all cover the same things: What you get, what it costs, the time period covered, when it can change, and what happens if either side violates the terms.

Once you sign a contract, you are legally bound by it whether you understood what you were agreeing to or not. Save these 10 contract tips as a checklist for any “sign here” situation.

  1. Ask around. Before considering a contract for any product or service, search online for the organization with which you are signing the contract and the keyword “complaints.” You can also ask your friends on social media if they have any horror stories about the particular organization or the type of service you are signing up for. Chances are that your friends will be able to give you an unbiased opinion on the product or service, which you may not always be able to find online.
  2. Prep yourself. Check online for sample contracts to get a feel for what to expect, or ask in advance for a contract to take home and thoroughly review.
  3. Get it in writing. Verbal agreements carry weight, and witnesses help, but if money is involved, get it in writing. It’s a big red flag if someone resists putting their promises on paper.
  4. Translate the “legalese.” Contracts are tricky. Don’t be embarrassed to take your time, call someone for help, or do an Internet search for words and phrases that you don’t understand.
  5. Be specific. If you see something vague, ask for exact terms. You can write the details in and have the other person initial anything new or changed.
  6. Take pictures. Especially when renting an apartment, car, moving truck, or other space for which you can be dinged on damages, do a walkthrough with the lessor and take note of all damages, documenting them with time- and date-stamped pictures. Have the lessor sign the contract (or an attached document) saying you will not be liable for the existing damages.
  7. Clarify discrepancies. We can all learn a huge lesson from Courtney’s situation. If a salesperson says one thing, but the contract says another, ask to change the contract. Even if you trust the person who is representing the organization in the contract, it is better to be safe than sorry.
  8. Fill in the blanks. Never sign a contract with any blanks to be filled in. “We’ll add that in later” is not OK. Get it all down in black and white up front.
  9. Don’t be afraid to cross things out. Even on a pre-printed contract, you have the right to question and even delete terms you disagree with. You need the lessor’s initials to make it official though. You may not always get what you want, but you will show the lessor that you are vigilant and won’t settle.
  10. Save a signed copy. Once the contract is completed, get a copy for yourself. Make sure it’s the final version, with all signatures and dates filled in. File this copy in a safe place so you have it in case any situation arises.

5 Common Contracts: What to Watch Out For

Here are some things to watch out for in five common contract situations. But remember, this is the tip of the iceberg. Any time you sign a contract—even for something that seems minor, such as carpet cleaning or plumbing services—the more you know, the better off you’ll be.

Apartment Leases

Before signing a lease, start with the basics: Are utilities included? When is rent due, and what if you’re late? Is the landlord allowed in if you’re not home? What are the security measures for the building? How many overnight visitors may you have, and for how long? When something is broken or needs to be fixed, who is responsible for making the repair?

Ask what the building’s insurance covers in terms of property damage from unexpected events such as fire or broken pipes. Do a walkthrough with the manager first, getting sign-off on any problems you find, and document damages with time- and date-stamped pictures.

Biggest apartment scam: Security deposits
Unless you are renting from a private owner, make your check out to a company rather than an individual. Do some research in your state to find out what’s refundable, and the rules regarding filing dispute claims if your landlord refuses to refund your security deposit. In some cases, the landlord may have to go to court to keep your money. Know what qualifies as vacating your residence and get proof when you turn in the keys. Refer back to pictures that you took when you moved in to show proof of pre-existing damages.

Gym Memberships

Understand what’s included in your contract. Is it extra for classes or special equipment? Are there hidden mandatory fees, such as towel or pool fees, whether or not you use these perks?

Biggest gym scam: Canceling your membership
The Internet is on fire with complaints of people who tried to cancel gym memberships, but continued to be charged. Know exactly what you need to do to cancel, and if cancellation isn’t valid until you receive confirmation from the gym personnel, watch out.

Mobile Phones

What happens if you move to a place with poor phone coverage? If you break the contract, are there costs beyond termination fees, such as paying back an upfront discount on the phone? Be especially careful if going through a reseller; they may have additional terms on top of the contract with the actual service carrier.

Biggest phone scam: Hidden mandatory services
You get a great phone at a great price, thinking you will use WiFi to access apps, then you are surprised to find that your phone carries a mandatory data plan for an additional fee. Keep in mind that if the price seems too good to be true, it probably is.

Self-Storage Units

What are you not allowed to store? What happens if you pay late, are unable to pay, or lose your key? What are the rules for clearing out? How do you get your deposit back? And if there’s a flood or fire, are you protected? Consider getting your own renter’s insurance policy to cover your stuff while it’s in storage.

Biggest self-storage scam: Rate hikes
It happens all the time—people get a unit at a great low price, but in a couple months, their rent goes up. Then, a few months later, the rent increases again! Be sure to read the fine print in the contract to see if it allows for rate hikes with no limits or notice.

Renting a Car or Trailer

What if you’re an hour late returning the car? Can anyone else drive? Are there limits on mileage or leaving the country? If it’s a truck or trailer, is there anything you can’t haul? What if you lose the keys?

Biggest auto rental scam: Insurance, gas, and add-ons
Car rental company employees often try to sell you extras. Unless you know you plan to use the whole tank, say no to pre-paid gas and fill it up yourself. It’s almost always cheaper. Also, ask your insurance agent if you need the supplemental insurance offered by the rental company. Check with your credit card companies too, as they often include supplemental insurance automatically when you rent a car with their cards. If you do opt for the rental company’s insurance, ask them to identify the individual parts—property damage, personal injury, etc.—and get only what you need.

Bookmark These Contract Resources

Whether you are ready to know more, or you are already dealing with a contract problem, here are a handful of helpful online resources:

The Mother of All Buyer-Beware Websites
The Federal Trade Commission’s “Consumer Information” site has a ton of helpful information. To get started, search “gym” or “rental car,” and dive in. http://www.consumer.ftc.gov/

Problems with Landlords
The tenant rights page at the federal Housing and Urban Development (HUD) site is a great place to start: http://tinyurl.com/hudrightsinfo

If you believe your apartment’s issues create a hazard, consider calling your city’s building or health inspectors. For other issues, try doing an Internet search for your state’s name along with the phrase “tenants rights” or “tenants association.”

General Legal Help
Many organizations offer free or low-cost legal help. Start your search with Legal Services, a government program to help people who might not otherwise be able to afford a lawyer: http://www.lsc.gov.

You also can find resources by doing an Internet search for “free legal aid” along with the name of your city, county, and state.