What is the difference between lease and rent agreement?

When you rent out your property like home or shop, you have to decide that if you want to offer your tenants a lease or a rental agreement. These terms are usually used interchangeably; however, they are not the same. So, I am going to explain the difference between a lease and a rental agreement, check it below in this article.

What are Lease Agreements?

The lease is an agreement between two parties in which one allows the other to use the property for a mentioned period without buying it. This is a form of renting your property but not the same. The length of the lease and the monthly rent mentioned in the agreement can’t be changed once done. Due to this, the owner will not be able to increase the rent and can’t tell the party to vacate the property within the lease period.

It is suitable for the property owners who want tenants for long period and can provide them with a fixed monthly income from the property. If the rent is reasonable, there are many tenants who prefer to sign a long-term lease. At the end of the lease agreement, sometimes the lessee gets an offer to buy the leased property by paying a particular amount or can continue with the lease, but it only depends on the owner of the property.

What are Rent Agreements?

A rental agreement is different from a lease agreement as it is not a long-term contract and mostly occurs on a month to month basis. At the end of a month, both parties are free to change the rental agreement. An owner can increase the agreement or can tell the tenant to vacate the property. However, in most of the cases, it is decided between both parties that if there is any need for vacating the property then they will give 1-month notice before leaving the place.

Rental agreements are useful if you are living in an area which has many students or professionals who shift from one place to other often.

So, if any company requires your property for a year or more then give it on lease and if there is no such requirement then the company may opt for a rental agreement, rest depends on your requirements.

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