Aside from owning a home, renting or leasing real estate is often the next best alternative to moving away from college dorms, roommates and even your parent’s house. For many renters, the term renting and leasing seem to be intertwined. However, in the world of real estate, these terms do have some degree of separation. As a renter, understanding the difference between renting and leasing, provides for a key understanding of the contractual obligation when moving into single family home, apartment or condominium.
Renting real estate commonly refers to the contractual obligation involved in establishing a residence for a very short period of time. Rental agreements may be short term, usually less than six months, and may involve a month-to-month agreement. For many renters, the rental agreement is not a better selection over lease agreements in terms of financial obligations. With the rental agreement, generally, renewed at shorter frequencies, the landlord or owner of the rental property may choose to adjust rent or non-renew a rental agreement, leaving many renters into a greater realm of financial distress.
Within the rental agreement, the provisions for short term or month-to-month occupancy are outlined as well as a provision for allowing a specified time period in which forewarning must be given before the rent can be increased or the tenant is required to vacate the premises; often limited to 30 days. Because the rental agreement does not provide for an expiration date, both the tenant and landlord are permitted to provide a 30 day notice of any change, at either party’s discretion.
In contrast to rental agreements, lease agreements provide for greater financial advantage to the renter. As a contract which allow for rental of a property at terms greater than six months, lease agreements lock in the rental rate during the entire lease period and provide both the tenant and landlord with protection against terminating the lease agreement. Within the lease agreement, the beginning and expiration date are clearly outlined as well as the amount of rent or lease payment to be made during the leasing period. Unless there are specific violations of the lease agreement, a landlord can, generally, not ask the tenant to vacate the premises prior the exhaustion of the lease agreement.
As with any real estate transaction, researching legal contract obligations is crucial to ensuring you fully understand your rights and responsibilities in the renting or leasing process. By examining your own needs and desires, in terms of commitment and financial obligation, a better decision can be made in terms of leasing over renting or vice versa.
For more information regarding real estate lease and rental agreements, visit www.nolo.com.