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Rent Agreement Vs Lease Agreement – Which To Choose?

posted in Rental Agreements by

Rental Agreement is a written contract signed between two parties, the Tenant and the Landlord as a testimony of granting tenancy/residency rights to the Tenant by the Landlord for a fixed duration of time.

A month-to-month Rental Agreement renews automatically at the beginning of the new month and can be changed with the consent of the Landlord by specifying the same in the Rental Agreement, while Leases cannot be renewed automatically.

rent or lease

What Is The Difference Between Rent and Lease?

Rent refers to the regular payment of tenancy, which expires after the duration of a month and at the end of which it is automatically renewed. The specification regarding the number of days the renewal is, understandably a month unless the landlord specifies changes in the rental agreement.

Lease, on the other hand, refers to the conveying of land or property to another for a specified term or period of time. Once agreed to make periodic payments as suitable to the landlord, (six months or more) the lessee need not worry about changing any clauses until such a time arrives when the lease needs to renewed.  

Some prefer leasing out their premises over renting as the former is prone to lesser price fluctuations as opposed to the latter. Also, neither can the lessee leave the premises without the completion of the lease term unless stated otherwise in the agreement. However, if the lessee must leave, he is provided with a cause notice denoting the period time within which he is to leave the premises.

Lease and rent are two words which now can be used interchangeably. By a far measure, both lease and rent can mean more or less the same thing. While convention holds that the difference exists in terms of duration, factually, it renders little difference to the rental agreement you will finally create, more so because the clauses within it need not be narrow definitions of what rent and lease are, but about what will suit you (either as a tenant or landlord) best.

So don’t worry about whether your agreement should be called as a rent agreement or lease agreement, as it’s just the tenancy agreement customized/tweaked to suit your needs and requirements.

What Information Should The Landlord and Tenant Provide?

The landlord is to disclose the following information to the tenant before the occupancy of the residential premises-

  1. The name, contact number and permanent address of the landlord.
  2. The name and contact number of the person looking after the residential premises in question.

While the tenant is to explicitly disclose his/her intentions regarding-

  1. The payment of various bills.
  2. The number of occupants of the residential premises.  

Other responsibilities include the landlord to ensure that the premises is emptied of by its previous occupants within the date specified in the tenancy agreement and to pass on a copy of the agreement to the tenant within 21 days of moving into the rented premises.

What Is Security Deposit?

Security deposit is the deposition of a relatively large sum of money with the landlord if the tenant opts to pay through monthly rent. While in the case of a lease, this deposit may be requested if you are subscribing to any kind of maintenance or any service.

It is to ensure the continuation of monthly payment if you should fail to pay it on time. The security deposit serves the same purpose in the case of a lease where if the lessee should fail to pay the maintenance cost or security charges, it can be deducted from the security deposit. When the agreement expires, what remains of the security deposit is returned to the tenant or lessee.  

When Should The Rent Be Paid?

The rent is usually expected to be paid within the first week of every new month. If and should another due date is specified in the agreement, there is a universal consensus with the due date to be the 1st of every month.

Should A Rental Agreement Specify Pet Allowances?

Chances are you may decide to get yourself a pet after moving in and settling a rental agreement while the contract itself doesn’t speak of any restriction or specifications on pet allowances. No specific chapter or section in the Rent Act of any state that the landlord can refuse to rent someone on the grounds of raising a pet. However, if the landlord adds an additional term or clause specifying the same the tenant might have to empty the premises.

Pet allowances isn’t the only clause which could be a potential cause for future disagreements but there are other clauses which need to be arrived at an oral agreement before drafting the actual rental agreement.

How To Make A Rental Agreement?

Most people referred to lawyers or agents specialized in constructing rental agreements, however, it can now be easily incorporated into the Do-It-Yourself platform through our website,

Here, using pre-drafted rental agreement templates created by our in-house lawyers you can fill up the blanks asking for your name, address, etc. to have the soft copy of your agreement ready. In addition to this, we also pay Stamp Duty charges and deliver the document to your home (now available in seven states). So why wait, start drafting a rental agreement, by clicking the button below.

10 Nov, 16

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Latest Comments

There are 3 comments on "Rent Agreement Vs Lease Agreement – Which To Choose?".


  • ***Poornima*** says: posted on 29 Jul, 2017

    Hi, this article will give you the purpose and key points about making a commercial lease agreement – . You can also create the commercial lease agreement on the same page by selecting your State and clicking ‘CREATE DOCUMENT’ button. You can also request for a custom agreement draft through ‘Request Service’ from the menu.
    To speak to our legal experts and clarify doubts if any, please book a legal consultation here –

  • ***dwarakanath modi*** says: posted on 26 Jul, 2017

    Iam having shoproom to leaseout for 10 years on rent.Pl.advice terms n conditios. Regards.

  • ***AWDHESH KUMAR YADAV*** says: posted on 10 Jun, 2017

    I am owner/landlord of a flat and want to create rent agreement for one specify with terms & conditions.

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