Leases vs. Rental Agreements: What's the Difference?
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Flexibility and stability for the property manager

Erin Eberlin is a real estate and proprietor specialist, 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, however they are rather different. A rental contract is one kind of contract a landlord can sign with a renter. A lease arrangement is an arrangement many people associate with renting a residential or commercial property.

Rental agreements provide more versatility for proprietors and tenants, while lease contracts provide more stability. Learn the essential distinctions between these two types of living plans.

What's the Difference Between Rental and Lease Agreements?

Length of Rental and Lease Agreements

Rental arrangements are usually short-term. It is common for these agreements to be valid for a period of 30 days. In particular cases, they can be even much shorter, lasting as low as a week.

Lease agreements are for a much longer term than rental agreements. The most typical lease term is for one year, but leases can be for any length of time as long as the proprietor and tenant accept the length. They can be as short as six months or as long as thirty years, which would be more common in business leases. The longer the lease, the most likely it is that your state will require it be in writing.

Renewing a Lease or Rental Agreement

Generally, rental arrangements restore automatically once the original term ends. All the regards to the original arrangement are still legitimate, consisting of the length of the agreement. So, if the original term was for a period of 30 days, the arrangement will automatically renew for another 1 month.

Lease agreements do not immediately renew. Once the original lease term is over, the tenant would have to sign a brand-new lease with the property manager if the landlord or renter wanted a long-term contract.

Terms of the Contract for Lease and Rental Agreements

The property owner can change the terms of the rental contract. It consists of altering the length of the contract or the rental rate. To make any changes, however, the property manager must offer the occupant proper notice.

This written notification will vary based on state law but is generally 1 month