Whether you are a landlord thinking of renting out your apartment or a tenant looking for a house, an agreement is necessary to avoid any disputes in the future. To know everything about rent and lease agreement, read the complete information in this blog.
A lease agreement is a formal written contract between a lessor (landlord) and a lessee (tenant). Usually, it is written by a legal professional. Neither all lease and rental agreements are in written form, nor are they implied by the government. Yet, it is necessary for both parties involved in the deal to sign a written agreement in order to avoid future confusion and conflicts.
Difference Between Rent and Lease agreement
In common practice, terms like “rental agreement,” “lease agreement,” “apartment leases,” “rental contracts,” etc. are used interchangeably. However, there’s little difference between rental agreements and lease agreements.
- In lease agreements, it is agreed that a specific asset or piece of property will be transferred to another person for a predetermined amount of time. Contrarily, rental agreements represent the transfer of an asset or property to another person in exchange for recurring, regular payments.
- Rental agreements are typically signed for shorter periods of time than lease agreements.
- According to lease agreements, the tenant is liable for all upkeep and repairs to the property. In rental agreements, the responsibility of property maintenance lies on the shoulders of the landlord or the owner.
- Lease agreements are usually “rent-to-own” types, while rental agreements are usually “month-to-month”.
- Usually, a lease agreement can’t be changed, but the terms of a rental agreement can be changed according to the landlord’s choice.
Types of Rental/Lease Agreement
Agreements for renting or leasing differ from situation to situation and are primarily differentiated by the length of the contract.
The Standardised or Long-term Agreement
Lease agreements are frequently standardized residential contracts. These are long-term agreements signed between a resident owner and the family renting that residence. In the majority of cases, standardized residential leases have a one-year expiration date.
Month-to-month Agreement
These contracts have a one-month duration, as suggested by their name. Most of these are rental agreements, which offer both tenants and landlords flexibility. Depending on the landlord’s decision, the tenant may choose to stay or leave the property.
A Vacation Rental Agreement
These are very short-term agreements that last only a few days. Vacation rental agreements are usually signed between the owners of vacation houses and the individuals who rent these houses for a week or two. Their purpose is just to guarantee that tenants don’t damage the property during their stay there.
Subletting Agreement
A sublet or sublease agreement is written when a lessee wants to transfer a particular property to another tenant. It can’t proceed unless the owner gives the lessee permission to sublet his or her property. In case the second tenant doesn’t pay the lease or rent, the direct tenant will have to compensate for the loss of the owner.
Fixed-term Agreement
Whether a property or land is leased for a short term or a long term, a fixed-term agreement ensures a contract between both parties only for a pre-agreed period of time. At the end of the agreement, it is possible to renew it through the mutual collaboration of the owner and the tenant.
Constant Renewal Agreement
This type of agreement is also called a periodic tenancy. The agreement is automatically updated after a certain period of time. It continues for an infinite period unless the lessee or the lessor decides to end the contract officially. In such a case, he must inform the other party about contract termination beforehand.
Rent-to-own Agreement
Some of the lease agreements are rent-to-own types. In such cases, an agreement is signed between the property owner and the tenant. The agreement claims that the tenant is bound to pay the Rent or Lease Agreement for a house or apartment unless he or she is eligible to buy the property. The owner has already made up his mind and benefits from the agreement during the period in between.
Commercial Lease Agreement
Commercial lease agreements are usually signed between property owners and commercial entities. These may be some organizations, firms, markets, or factories. Such types of agreements are far more formal and feature greater legal involvement.
Land Lease Agreement
Land lease agreements are signed between landowners and the individuals/firms who want to lease the land and use it as a means of agriculture or commerce.
What to Write in a Lease or Rental Agreement?
The components of a universal lease agreement usually include:
- Name, basic information, and contact details of the lessor
- Name, basic information, and contact details of the lessee
- Details of the property under a lease may include address, total area, dimensions, utilities included in the lease, inventory, etc.
- The period for which the contract is being signed
- Details of the Rent or Lease Agreement; these include bank account details of the lessor and details of advance payment (security fees) and additional payment after the due date etc.
- Terms which the lessee must comply with while using the lessor’s property
- Terms for contract termination before the designated time
- Rights and responsibilities of both the tenant and the owner
Things to Consider Before Signing a Lease Agreement
A rental agreement is more flexible and can be changed at the request of the tenant or at the choice of the owner. Since a lease agreement can’t be changed, you must be very careful about signing a lease agreement. Here is everything about Rent or Lease Agreement to keep in mind before signing one.
- Read and understand all the terms and conditions mentioned in the agreement very carefully.
- Do not disregard any part of the agreement, no matter how minor. Large-scale property disputes can sometimes be caused by insignificant issues.
- If you are a group of individual tenants, make sure to include the names of every tenant in the agreement to avoid any future conflict.
- Make sure which facilities are included in the contract and which ones you have to pay for.
- Keep track of all the additional charges to manage your budget accordingly. For example, agency fees, security deposits, etc.
- If you have a pet, make sure that your agreement allows you to keep it in your new home.
Conclusion
Rental and lease agreements are signed between property owners and tenants to ensure that the contract lasts smoothly throughout the tenancy period: https://www.tenancy.tn.gov.in/. The agreement’s general structure does not change, even though the terms and conditions may vary slightly from one location to another.
Read More:
