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

Flexibility and stability for the landlord

Erin Eberlin is a realty and property manager expert, covering rental management, renter acquisition, and residential or commercial property investment. She has more than 16 years of experience in genuine estate.


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

Rental agreements provide more versatility for landlords and occupants, while lease contracts offer more stability. Learn the crucial distinctions between these two kinds of living arrangements.

What's the Difference Between Rental and Lease Agreements?

Length of Rental and Lease Agreements

Rental agreements are normally short-term. It prevails for these contracts to be legitimate for a duration of one month. In specific cases, they can be even much shorter, lasting as low as a week.

Lease agreements are for a much longer term than rental arrangements. The most common lease term is for one year, but leases can be for any length of time as long as the landlord and occupant accept the length. They can be as short as 6 months or as long as 30 years, which would be more common 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 arrangements restore immediately as soon as the initial term ends. All the terms of the initial agreement are still legitimate, including the length of the contract. So, if the original term was for a period of thirty days, the arrangement will immediately renew for another 1 month.

Lease agreements do not immediately restore. Once the original lease term is over, the tenant would have to sign a new lease with the property manager if the property manager or occupant desired a long-lasting agreement.

Terms of the Contract for Lease and Rental Agreements

The landlord can change the regards to the rental arrangement. It includes changing the length of the contract or the rental price. To make any modifications, however, the proprietor needs to give the occupant appropriate notice.

This written notice will vary based upon state law but is usually thirty days