Lease vs Rent – Which one to choose?
Although both the terms – rent and lease are used interchangeably by a lot of renters, liaising a property does not equate to renting a home.
There are many legal ways in which one can get a rental property, depending on how the rent agreement is registered and drafted. A lease is one of the few ways to rent a real estate property.
A rent agreement will be treated according to nature – lease or a license. This rent agreement is particularly based on the renting period and the terms and conditions that are mentioned in the agreement. This is mainly because both these agreements are governed under various laws and hence, have different characteristics.
What is the difference between lease and rent?
Rent means the regular tenancy period which expires at every month-end and gets renewed automatically. The duration of rent is usually a month or whatever is mentioned by the landlord in the rental property agreement.
On the other hand, a lease means conveying real estate property or land to another person for a period of time or a specified term. Once the lessee agrees to make periodic payments that are suitable to the landlord (which is usually 6 months or more), he/she need not worry about the lease being changed unless it needs to be renewed.
A lot of people who own properties in Mumbai prefer leasing out their premises over renting. This is because a lease encounters fewer price fluctuations as compared to rent. In a lease agreement, the lessee can’t leave the premises without completing the lease term unless it is stated otherwise.
Leasing is more common for a commercial property due to the value involved in transactions like these that require proper legal protection for both the tenant and the landlord.
Key takeaway
A rent agreement can either be a license or a lease. The landlord has to transfer the right of a property to the tenants for them to make use of it. Leasing is commonly used for any commercial property.
To avoid the legal complexities that come with the signing of a lease, rent agreements are usually preferred in the residential segment in India. These rent agreements are typically signed for 11 months. This is because rent agreements that have a duration of less than a year do not require any registration. However, in the commercial segment, the lease is chosen as it has a longer period of span.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
