Question

Suppose you are considering renting an apartment.​ You, the​ renter, can be viewed as an agent while the company that owns the apartment can be viewed as the principal. What agency conflicts do you​ anticipate? Suppose,​ instead, that you work for the apartment company. What features would you put into the lease that would give the renter incentives to take good care of the​ apartment?

Answer 1

Answer:

Kaynaddi here is the answer of your question

The agent is not the owner of the apartment so he will not take care of the apartment, because he isn't supposed to pay the cost of fixing damages in the apartment. To mitigate this risk renter can be asked to pay a deposit which can be adjusted for any damages done in the apartment.

A provision in the lease agreement for the annual renewal allows an incentive for a renter who is long term. Doing so will help maintain leased apartment.