For first time renter or even first time landlord, having an agreement is of great importance. However, for newbies there might be some confusions lurking on the background, especially when dealing with the concept or the difference between rental and lease agreement. Below are simple details which would help you decide what type of agreement to craft and to whom it would best apply.
The Difference between Rental and Lease Agreement
Rent agreement is usually intended for a short period of time, which then could be renewed or discontinued by either the renter or the landlord. The main purpose of this agreement aside from the fact that it states that tenants should pay rent at a given period of time, is that it gives both the tenant and landlord a sense of freedom and flexibility. As suggested by propertycluster, freedom and flexibility would mean that "tenant can freely live anywhere for a month or more as desired, a landlord on the other hand is free to rent out to some other tenant or change some clause and raise the rent."
Lease Agreement on the other hand is intended for tenants who wanted to stay a bit longer at a particular place. This would usually amount to a 12 month period or more. From a certain angle, lease agreement are bit more detailed, it may even include some clause regarding pets and the responsibility of finding someone to take over once the original tenant moves out. But still, clauses found in the agreement and the changes to be made are subject to approval by both parties, thus protecting the rights of both tenant and landlord.
Advantages
For a tenant, the best advantage seen in a lease agreement is the sense of security, suggesting that landlord cannot simply change some terms, such as rent, without any prior notice. And from a landlord's perspective, lease agreement would assure him or her fixed rent for a certain period of time under some fixed terms and conditions.
Rental agreement on the other hand, would likely suit people who like to settle momentarily in a place, let's just say for at least a month or two. And with this in mind, renters are given the flexibility or freedom to change addresses. The changes with agreement terms can also be done by landlords when things are not seen suitable for both parties.
Still it would be good to note that from a legal perspective, there is only little difference between rental and lease agreements.
