Rental vs Lease
Rental is an oral or a written agreement between a landlord and the tenant that provides for the terms and conditions for the usage of the property by the tenant for a short time period. Typically it includes the payment that the tenant has to make every month in return for rights to live and use the land, office, machinery, or the apartment as the case may be. A rental agreement is flexible and is made on a month to month basis. The terms of payment and usage are flexible and can be changed by the concerned parties at the end of a month though they are subject to rental laws in the country. If the landlord decides to increase the rent, the tenant can agree to the increased rent, negotiate with the landlord, or decline to sign the new agreement and vacate the premises.
What is the difference between Rental and Lease?
• Rental is an oral or a written agreement between a landlord and a tenant for a short time period (on a month to month basis) where the tenant agrees to pay a sum of money on a monthly basis whereas lease is a written agreement for a set period of time (usually 1 year).
• While the terms can be changed after a month in a rental agreement, a landlord cannot increase the rent inside the duration of the lease agreement and also cannot evict the tenant from the premises during the time period of the lease agreement.
• Lease provides stability and does not ask the landlord to look for a new tenant frequently. It is, therefore, preferred in places where there is a seasonal shortfall of tenants.