Even today world’s most of the population doesn’t own their homes, so they rent or lease the apartments or houses to carry on the life cycle. People often use the terms. Lease and rent interchangeably as they think they are synonymous with each other, but that is not the case as they have a defined thin line which differentiates both these terms from each other. The lease is the long-time contract between the lessor and lessee through which the latter is allowed to use the asset belonging to lesser for the certain period. The periodic rentals are paid by the lessee, which works as the consideration of the house/land he lives in. On the other hand, the rent is the short-time contract in between landlord and the tenant. In this case, the assets of the landlord are used by the tenant in exchange for the fixed consideration for the limited period. The regular payments are made by the tenant to the landlord for the usage of his property or land.
What is Lease?
The lease is the long-time contract between the parties called lessee and lessor; the latter buys the asset and then grants its asset to the lessee for the spec if the period in exchange of the periodical lease rental. The periodical lease rentals work as the consideration for the use of assets that belong to another party. The more comprehensive definition of the lease would be a contract by which one party conveys land, property, services, etc. to another for a specified time, usually in return for a periodic payment. The terms and conditions once opted during the contract signing can’t be changed until the period for it exists. The lessee gets an offer to buy the leased land at the end of lease term by paying the residual amount for the land. The residual amount or the residual value is the technique through which it is determined that how much the lessee has paid through the lease payments and what is the estimated worth of the fixed asset leased after the end of the lease term.
What is Rent?
The rent is the short-time contract through which one party known as landowner lets his property rent to the tenant in exchange for the regular payments. The terms once decided for the rent goes on extending from month-to-month without any objection until both the landowner and tenant decide to end up the contract. The process of red-defining the conditions of the rent is known as the rental agreement; it can either be formal or informal in nature. Means the rental agreement with the mutual consent of both the parties can either oral or the written in nature Although the renting cost is high, it is still convenient for the tenant who requires the land for the limited time. To modify the terms and conditions or to raise the rent, the landlord has complete right to do so with extending a prior notice to the tenant. Quite similar to this, the tenants who do not agree with the assist they have rented can leave and go for the better suitable place after extending at least a one-month prior notice to the landowner. A superb benefit tenant enjoys is that he lives in the house or the land, but if there is any cost for the repair and maintenance, that is bearded by the landlord. Once the rental agreement between both the parties gets expired, it automatically gets renewed.
Lease vs. Rent
- A contract by which one party conveys land, property, services, etc. to another for a specified time, usually in return for a periodic payment is known as the lease. On the other hand, the rent is the short-time contract through which one party known as landowner lets his property rent to the tenant in exchange for the regular payments.
- The lease is the long-term contract, whereas the rent is the short time contract between two parties.
- The two parties getting in the lease agreement are known as the lessor and lessee while the landlord and the tenant are the contracting parties in the case of renting.
- The terms and conditions once opted can’t be modified until the lease terms end. Opposed to this, the landowner can change the terms and conditions of the rental agreement ith extending a prior notice to the tenant.
- The rental agreement gets automatically renewed, but the lease contract is set again after the new contract is set between the lessor and lessee.