A rental or lease agreement is an essential legal document that must be signed by the tenants and landlords before offering/occupying a place temporarily. Some homeowners consider leasing their property; whereas, others consider renting as the best option. The purpose and the time dictate their decision to choose either. Letís see how:
Although the line of demarcation between the two is not really very thin, it is vital to understand the differences to make an informed decision while renting/leasing a residential property. So, here in this guide, we have compiled all the major differences that both the parties in the agreement must know before agreeing to any contract.
The Facts First
Rental agreements or letting the property at rent means giving the property for a short term to someone. Usually, the tenure and terms of rent extend to any number of months until the parties decide to terminate them.
Leasing, in contrast, is an agreement where one party permits another party to use the property for a certain period of time. Usually, the term is of 12 months; it can increase or decrease as per the convenience of the parties.
The rental agreement renews automatically after a month unless otherwise communicated or altered verbally or in writing by any of the parties.
In the lease agreement, both the parties have to sign the contract again. At the end of the lease, the parties in agreement get the option to change the length of the lease or continue on the same.
Changes in Terms of Agreement
When a tenant is staying on rent, the terms of the contract can be altered any time (not in the mid of an ongoing month) as deemed suitable by the landlord.
While, in a lease agreement, the terms of the contract can only be altered after the contract ceases to exist.
Which one to Choose
So, the perennial question is, which one is better? Both agreements have their own advantages and disadvantages. It all depends on the requirement and the parties. It can be analysed by a simple comparison.
For example, if you have moved into a new city and your stay is for a longer time, it is better to sign a lease agreement as the lessor will not be able to force you to move arbitrarily. This condition is mutually beneficial as the lessee will also not be able to vacate the property abruptly.
On the other hand, if you are in the middle of house hunting or unsure about when youíll move, it is not feasible to sign a contract for a long duration. In the short term contact at the end of 30 days, both the parties are free to change the terms and are not obligated by each other's terms and conditions. As of today, the rental agreements are tilted in favour of tenant.
All in all, a lease offers more security to the parties while rent offers flexibility. You can choose the one which is ideal for your situation. You can also consider renting or leasing as a lucrative earning opportunity. For this, buy fully-furnished, luxury flats in Jaipur at KGK Oasis, which will give you good returns. You can lease them for extended periods to ensure additional income.