What's The Difference Between A Lease VS Renting

What's The Difference Between A Lease VS Renting

The terms “leasing” and “renting”, which are interchangeably used, both refer to paying a fee to a landlord when accommodating a residential property for vacation or long-term use, an office space, or a building for your business. But, what's the difference between the two?

In this post, you'll learn what makes leasing different from renting. In that way, you can use the right terms according to their genuine purpose.


Length of Agreement

There’s a remarkable difference in the length of agreement between leasing and renting. For a lease, the length of agreement usually goes from 6 to 12 months. For rent, two or more parties usually agree, and the payment is made as long as the lease requires.

A rental agreement provides tenancy that is shorter than lease agreements, which is usually 30 days. In short, renting is synonymous with short-term use, and lease is for long-term use.


Certainty of Income

Month-to-month agreements have pros and cons for both property owners and tenants. For property owners, the rental income becomes uncertain, that's why property owners tend to charge month-to-month tenants a higher rate as compared to a lease.

For tenants, monthly rental agreements give more freedom to move in their most convenient time, without worrying about transferring or breaking a lease agreement (learn more about broken lease eviction below). Consulting a lease and rental specialist like iPropertyManagement.com can help you determine your best options.


Broken Lease Eviction

Tenants are shifted to a monthly rental agreement when a lease expires until both parties sign a new lease agreement with a new expiration date. Tenants should comply with the rules in the initial lease. However, the terms can be subjected to change when shifted to “month-to-month”.

The tenant can always break the lease agreement if the rental property is operating illegally. State laws vary, and the tenant is usually entitled to get back at least a portion of the rent they’ve paid over the life of the lease. Sometimes, tenants are also entitled to receive additional money to assist in finding another rental apartment.

While landlords can sue a tenant for damages and breach of contract, a tenant can legally get out of the lease if the rental property is not in good condition. The landlord should make sure that the property is in good condition. By doing so, getting complaints from the health and safety organizations or agencies is avoided.

Here are some ways to fix broken lease apartments by keeping rental properties in good condition:

- Make sure that rental properties have running water at all times.
- Keep all common areas clean.
- Provide proper trash bins.
- Fix any broken fixtures or damaged part of the building, like a leaky roof.

Once a file is submitted, an inspector will check the rental property to find out if the complaint of the tenant is valid. A violation notice will be sent to you if the complaint is confirmed valid, which would warrant fixing the problem for a specified number of days. If the problem persists and the issue is not fixed, a tenant can legally break the lease agreement.


Property Management Licenses

Both lease and rental properties should obtain proper licensing. The common property management licenses one needs to obtain before they could legally rent out a rental property include the Certificate of Occupancy and the Housing Business License.

Here are the details:

- Certificate of Occupancy: This certificate is issued by regulatory authorities. All rental and lease properties should be legally built and properly maintained before accepting tenants.
- Housing Business License: This license is required for all lease or rental units. It is obtained after getting the Certificate of - - Occupancy. Your business license highly depends on the type of lease or rental property. For instance, a rental apartment is different from leasing a single-family residence, condo, or a duplex.

Even if all proper documents have already been filed with appropriate government agencies, landlords are not entirely free from the hassle of licensing for the reason that business licenses expire. Also, the requirements may change over time. Stay on top of fees and renewal deadlines for compliance. Follow the rules when it comes to renting properties, and landlords should be understanding and approachable to avoid a broken lease.


Agreement

A lease is mutually beneficial for property owners and those tenants who want to find a place to stay for at least 12 months. Through a lease agreement, the tenant and the landlord both agree to fixed lease terms and conditions, like the duration of the agreement and rules regarding pets. Both parties cannot change any of the terms and conditions without written consent.

For instance, a tenant cannot vacate the property or stop paying during the lease term because it's a violation of the lease agreement. On the other hand, the landlord cannot arbitrarily force renters to leave because of a higher offer or a family relative will occupy the space. It's because the tenant has already secured the space with a binding lease agreement.

For rental agreement, the terms and conditions are subjected to changes month to month. Regardless if it's lease or rental, property owners should make their tenants happy by addressing all questions and concerns quickly.

Here are some good-to-know facts about leasing and renting:

- Repair and Maintenance: The landlord is only allowed to enter a rental unit to make repairs, inspect the unit, and show the unit to interested or prospective tenants. Otherwise, landlords have to provide at least a 24-hour notice before entering the unit.
- Rules: Property owners should always follow the lease and rental rules as set forth by the law. Otherwise, the tenant can get a court order, and violating this can warrant the tenant to terminate the lease legally.
- Emergency Cases: In case there’s an emergency that may likely pose property damage or risks of injuries, the landlord can enter the tenant’s unit without permission or advance notice. A landlord can act right away if there’s evidence of fire, flood, or domestic violence and other forms of crime.


Conclusion

Property owners and tenants alike need to know the difference between leasing and renting to prevent broken lease and improve tenant attrition. Lease and rental length and terms of agreement greatly differ, wherein lease is fixed and long-term, and rental is temporary and short-term. Of course, regardless if it’s a lease or rent, tenants are expected to follow the rules specified in the contract to avoid eviction.