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

Flexibility and stability for the landlord

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


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The terms rental arrangement and lease agreement are often used interchangeably, but they are quite different. A rental contract is one kind of agreement a proprietor can sign with a tenant. A lease arrangement is a plan many people relate to leasing a residential or commercial property.

Rental arrangements more versatility for proprietors and renters, while lease agreements use more stability. Learn the key differences in between these two types 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 agreements to be legitimate for a period of one month. In particular cases, they can be even shorter, lasting as low as a week.

Lease arrangements are for a a lot longer term than rental contracts. The most typical lease term is for one year, however leases can be for any length of time as long as the landlord and tenant agree to the length. They can be as brief as 6 months or as long as thirty years, which would be more typical in business leases. The longer the lease, the more likely it is that your state will require it be in composing.

Renewing a Lease or Rental Agreement

Generally, rental arrangements renew immediately as soon as the original term expires. All the regards to the original arrangement are still valid, including the length of the agreement. So, if the original term was for a duration of one month, the arrangement will immediately restore for another 1 month.

Lease agreements do not immediately restore. Once the initial lease term is over, the tenant would need to sign a new lease with the proprietor if the property manager or renter desired a long-term agreement.

Terms of the Contract for Lease and Rental Agreements

The proprietor can change the terms of the rental agreement. It consists of changing the length of the arrangement or the rental price. To make any changes, however, the proprietor should give the tenant proper notification.

This written notice will vary based on state law but is typically one month