Differences Between A Lease And A Rental Agreement

When a landlord rents out his / her property, its possession is handed over only after the tenant / tenants have agreed to and signed a lease or a rental agreement. Although, both terms i.e. lease and rental agreement, are used interchangeably, it is important to understand they do not carry the same legal meaning.

Technically speaking, a lease has a finite term i.e. six months, a year or whatever period is decided on between landlord and tenant. During the agreed upon time period, which is also called duration of the lease, both tenant and landlord are required to uphold the terms of the written agreement entered into.

A lease arrangement means neither party can alter any of the lease terms until the lease expires. However, changes are permissible if both landlord and tenant agree to them. For example, if a landlord wishes to raise the rent from the current $550/- a month, he / she can only do so after the lease has expired.

While, it is in effect, a lease ensures tenants make monthly rental payments as agreed upon, and follow the lease stipulations. Further, a tenant cannot vacate the property without breaking the lease, and in some cases, he / she may be held responsible for paying rent for the remainder of the lease term, or else to find a replacement willing to take over the lease.

Lease agreements are popular with landlords with mortgage payments to make, and they like the stability that comes with locking in a tenant for a specified period of time, an arrangement that allows them to budget their expenses, accordingly.

Rental agreements are short-term, differing from leases in various ways. Most standard rental agreements are month-to-month arrangements and do not have a set period of residence. They allow landlords and tenants to make changes to the rental agreement after the 30-day period, subject, of course, to rent control laws, if any.

The changes may relate to rent increases, modification of rental agreement terms, or even a request to vacate property. However, in most states it is common practice for both the landlord and tenant to give a 30-day notice before changes can take place. If your state does not require a notice period, go ahead and in case, your tenant is not agreeable, he / she is free to give their 30-day notice to vacate your property.

Rental agreements are useful for landlords with rental property in an area with a strong dominance of students or professionals on the move. The freedom provided by a month-to-month agreement suits their peripatetic lifestyle perfectly, though it does mean a landlord has to find new tenants on a more frequent basis than one with a long-term lease.

Before renting out your property, you must take into account the differences between a lease and a rental agreement, basing your decision on your needs. It is also advisable to screen tenants and conduct background checks to avoid and future litigation. Visit www.e-renter.com for help with your tenant screening and background check needs.