Attack of the Fees

So, you've found an apartment with the rent that you want, and you're ready to sign the lease. Then, you notice that your initial payment upon signing looks different.

It's too much. It's more than you thought.

Suddenly, the comfortable fit feels a bit tighter than you'd like. If you were already at the top of your range, you may feel torn between staying within your budget and stretching for the apartment that you've toured and imagined to be your new home.

Invariably, the bottom line number has escalated because of additional fees that the apartment is going to charge you. Some leasing agents may have forgotten to mention them, some of them assumed that you'd already planned for them, and some of them, frankly, were hoping you'd just go along with it.

The types of fees

Regardless of the leasing agent's motivations, you should never just sign blindly and ignore the higher charge. Instead, you need to have a conversation about each line item on the fee schedule.

However, you should be aware of the types of fees that you'll encounter when you lease an apartment. They tend to break down into one of three types, so let's go through each type and what (if anything) you can do about them.

Upfront

Upfront fees are the one-time fees that you'll have to pay either when you sign your lease or when you go to pick up your keys to take possession of the unit. These charges usually cover administrative charges and deposits. Typical upfront fees include:

• Application fee

• Security deposit

• Administrative or move-in fee

• Pet deposit

As their titles imply, the application and admin fees are nonrefundable. Unfortunately, they can be quite high, especially for high-end properties. They definitely are soaking you, but there's very little to be done about it as a practice, as most complexes use them. However, make them part of your shopping process if you're not able to afford much more on top of the rent payment.

Security and pet deposits are a bit more forgiving, in that they, as deposits, are generally refundable at the end of your lease term. However, be aware that, as you live in the unit, the cost to fix any damage to the unit that you cause will become deductions against those deposits, leading you to get less back than you paid initially.

Recurring

Here we find the real bugaboos. With upfront fees, it is possible that you can float their cost for a single month. It may sting, but it's okay because they only happen once.

However, recurring fees are the additional monthly charges that effectively serve as permanent increases to the rent amount the leasing agent quoted you. Some agents will pre-calculate their impact for you, but others will not and will leave those calculations and determinations to you.

Common recurring fees include the following:

• Utilities

• High-speed internet

• Pool/amenity access

• Parking spot/garage

• Pet rent

• Renter's insurance

• Storage unit

• Washer/dryer rental

The biggest question you should ask about every single one of these fees is the following - is this fee mandatory?

To be clear, I'm not saying you should scream it at the agent. However, you need to find out exactly which fees you are required to pay as part of your lease and which are optional.

Usually, utilities like water, sewer, and trash are mandatory fees, although some complexes may include them as part of the rent. Some apartments also have similar requirements for high-speed internet service. Finally, it is not uncommon for an apartment to require that you carry some level of renter's insurance.

Power and gas are a bit hit or miss in terms of how they are handled. Regardless, like renter's insurance, the apartment will likely insist you show proof that you've gotten those services in place before they give you the keys.

The other items on the list are much more likely to be optional. However, much like a fast food restaurant putting every topping on your burger by default, most complexes will start from the position that you're taking all of them.

No matter what, ask whether every single fee is mandatory. It doesn't matter if it's obvious. Get the leasing agent to confirm. If they say anything like "technically, no," they're not used to hearing people ask.

Error

The final type of fee is one that you'll hopefully avoid. Unlike the others, these fees are almost universally optional. However, you don't choose to pay them beforehand. Rather, you usually pay them after your lease term expires.

Common error fees are:

• Broken lease/reletting fee

• Lockout/lost key fee

• Cleaning fee

• Late rent fee

These are self-explanatory. They attach when you do something "bad," or something that creates a hardship for the complex when it retakes possession of your former unit (or you forget to pay rent in the grace period after the first of the month).

Be strong and have answers

It's important to keep your head about you when you ask about these fees. As I mentioned above, you may catch the leasing agent off-guard merely by asking questions about them, so be prepared for the surprise.

However, do not be bullied into a fee. If the fee is optional, consider what alternative approaches will satisfy the same needs in your life. For instance, if there's a pool/amenity fee, find out if a nearby gym has the same equipment or pool.

If the fee is mandatory, then consider whether you can afford it, and be willing to walk away. Remember - no apartment is that special, and you don't need to hurt yourself in pursuit of a unicorn property that is "perfect."

Finally, watch out for provider "suggestions" that the leasing office gives to you. In some cases, you may have to use them because the complex isn't wired or configured for any other provider's services.

However, in most cases, the office wants you to use them because they get a commission or kickback for each resident who does. So, the level of service offered by the provider might be secondary to the real reason that you're hearing about it.