Leases vs. Rental Agreements: What's the Difference?

Flexibility and stability for the proprietor

Erin Eberlin is a realty and proprietor specialist, covering rental management, tenant acquisition, and residential or commercial property investment. She has more than 16 years of experience in property.


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The terms rental agreement and lease agreement are often used interchangeably, however they are quite different. A rental agreement is one type of agreement a proprietor can sign with a tenant. A lease contract is an arrangement the majority of people associate with renting a residential or commercial property.

Rental contracts provide more flexibility for landlords and tenants, while lease agreements offer more stability. Learn the key differences in between these 2 types of living plans.

What's the Difference Between Rental and Lease Agreements?

Length of Rental and Lease Agreements

Rental agreements are usually short-term. It is common for these agreements to be legitimate for a duration of one month. In certain cases, they can be even shorter, lasting as little as a week.

Lease contracts are for a much longer term than rental arrangements. The most typical lease term is for one year, but leases can be for any length of time as long as the proprietor and occupant accept the length. They can be as brief as 6 months or as long as 30 years, which would be more typical in industrial leases. The longer the lease, the more most likely it is that your state will require it be in writing.

Renewing a Lease or Rental Agreement

Generally, rental agreements renew instantly as soon as the term ends. All the terms of the initial agreement are still legitimate, consisting of the length of the arrangement. So, if the original term was for a duration of thirty days, the arrangement will immediately renew for another one month.

Lease agreements do not immediately renew. Once the original lease term is over, the renter would need to sign a new lease with the property manager if the property manager or occupant preferred a long-term contract.

Regards to the Contract for Lease and Rental Agreements

The proprietor can change the terms of the rental arrangement. It includes altering the length of the contract or the rental cost. To make any changes, however, the landlord should give the renter correct notice.

This written notice will vary based upon state law however is typically one month