Understanding residential lease agreements

This guide will prepare you for anything that comes your way during the house hunt.

Editorial Team

By Editorial Team

couple smiling while signing a lease agreement

Anyone who has ever had any kind of experience with legal documents knows that they are often filled with a bunch of confusing terms. Residential lease agreements are no different and tend to include vocabulary that most individuals are not familiar with.

It is crucial that people understand what they are agreeing to when they sign on the dotted line. Therefore, this article is here to help decode some common but confusing terms that can be found in a residential lease agreement.

Lessee and lessor

While you might get lessee and lessor mixed up, they are actually simple words to define. A lessee is a tenant or renter, which is the person planning to live in the apartment. The lessor is the landlord or property manager. They have to directly interact with tenants and handle questions or issues with the apartment. 

Common areas

Having the term ‘common areas’ in a residential lease agreement has nothing to do with how frequently the areas can be found in the buildings. It actually refers to the amount of access that various individuals have to the area.

common area in an apartment building with a wooden pool table in front of large panel windows and a dark wooden shelves unit

For example, if a certain room is labeled as a common area, it means that everyone in the entire apartment building will have access to that room.

For example, hallways, laundry rooms, games rooms, and rooftops.

Application fee

An application fee is just one of the many things that a tenant might have to pay when they are first applying for an apartment.

Many property managers and landlords prefer to run credit checks and criminal background searches on their various applicants. This means that they will be incurring some expenses when processing an individual’s application.

Rather than absorb that cost, they tend to pass the cost on to the applicant in the form of an application fee.

Furnished apartment

This is something that tends to be rare, but when it is found it is incredibly valuable. Locating an apartment that comes fully furnished, will mean that it provides the basic furniture and supplies that are needed to live for the long term. This commonly includes things like a couch, bed, table, kitchen essentials, bathroom items, and a T.V. 

small bedroom with green accent wall and painting

Getting a furnished apartment can be extremely beneficial for someone who is looking for short-term housing.

That way, they can either sell their existing furniture or leave it behind. This prevents them from having to pack it up and transport it.

For someone who is interested in securing a premium furnished apartment, take a look at Blueground. As a real estate tech company, the goal is to make renters feel at home wherever they choose to live.

Not only are all of the apartments thoughtfully designed, fully furnished, and completely equipped, but they are also located in sought-after neighborhoods. These properties also feature variable residential lease agreements that can range anywhere from one month to a year or even longer.

Above all, Blueground makes the renting process especially easy by providing the opportunity to sign the lease online. 


When looking at apartments, there are typically two different types of kitchens. The standard type of kitchen is the one that people most often picture which includes a fridge, stove, oven, dishwasher, and ample cupboards and drawers.

However, there is also the possibility that the kitchen could look much different than this, without all the expected space and amenities.

In this case, the space is referred to as a kitchenette in the residential lease agreement.

A kitchenette tends to be much smaller than a regular kitchen and is likely lacking a couple of things. The appliances that the kitchenette comes with will be much less than the standard equipment or they may be missing altogether.

Some common things for a kitchenette not to have: 

  • Oven
  • Full-sized fridge (often replaced by a mini-fridge)
  • Four-element cooktop (sometimes replaced by a hot plate)

Security deposit

A security deposit is meant to be a sum of money that the landlord or property manager keeps for the entire duration of the tenant’s stay.

Generally, it’s something that is paid in order to guarantee that an apartment will go to a specific individual.

woman sitting on a bed with her laptop and other papers, holding a cheque

However, the reason why they keep the money is so that if any damage is caused by the tenant, the security deposit will be used to make the necessary repairs.

Fortunately, if the tenant is able to go through their entire lease without causing any damage to the apartment, then they will get their security deposit back in full.

Editorial Team

Editorial Team

The Blueground editorial team covers the best things to see, do, and experience in our cities around the world.