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

Flexibility and stability for the property manager

Erin Eberlin is a property and property owner professional, covering rental management, occupant acquisition, and residential or commercial property financial investment. She has more than 16 years of experience in realty.


Hispanolistic/ Getty Images

The terms rental agreement and lease arrangement are typically used interchangeably, however they are rather various. A rental arrangement is one kind of agreement a proprietor can sign with a renter. A lease arrangement is an arrangement many people connect with renting a residential or commercial property.

Rental agreements provide more versatility for property owners and occupants, while lease agreements provide more stability. Learn the essential differences in between these two kinds of living arrangements.

What's the Difference Between Rental and Lease Agreements?

Length of Rental and Lease Agreements

Rental arrangements are usually short-term. It is typical for these contracts to be legitimate for a duration of 1 month. In certain cases, they can be even much shorter, lasting as little as a week.

Lease contracts are for a a lot longer term than rental contracts. The most common lease term is for one year, but leases can be for any length of time as long as the landlord and tenant accept the length. They can be as brief as 6 months or as long as thirty years, which would be more common in industrial leases. The longer the lease, the more most likely it is that your state will need it remain in composing.

Renewing a Lease or Rental Agreement

Generally, rental arrangements renew automatically when the initial term expires. All the regards to the initial agreement are still valid, consisting of the length of the arrangement. So, if the initial term was for a duration of one month, the contract will immediately restore for another 1 month.

Lease contracts do not immediately renew. Once the initial lease term is over, the renter would have to sign a new lease with the property manager if the proprietor or occupant preferred a long-term agreement.

Regards to the Contract for Lease and Rental Agreements

The property owner can alter the terms of the rental agreement. It includes altering the length of the arrangement or the rental rate. To make any modifications, nevertheless, the landlord should give the tenant proper notice.

This written notification will vary based on state law but is normally 30 days