The Difference Between a Lease and a Rental Agreement

Vandalism, nonpayment, rule violations, and parties—these are a few examples of problems you might encounter when you don’t properly qualify your tenants. Whether you have long-term leases or short-term rentals, there is no guarantee against undesirable occupants. However, you will be better able to legally secure your property with carefully drafted legal contracts that clearly outline the landlord’s and the tenant’s rights and responsibilities.

The first and foremost prerequisite for a safe tenancy is a lease or rental agreement that specifies the terms of the tenancy, includes a security deposit, specifies the obligations of both parties, and provides specific usage guidelines. You must, however, understand that a lease and a rental agreement differ in subtle but very important ways before signing this document. Although these terms are commonly used interchangeably to refer to the same thing, they describe two different types of contracts. So, what are the key differences between renting and leasing? What are the pros and cons of using each type of contract? Before creating the document, do you know which one you really need?

What Is a Lease Agreement?

You have found a great tenant for your rental apartment and are ready to lease it for at least a year. You want to ensure that this long-term rental is lawful and that the tenant will follow the rules, such as not keeping pets inside the apartment, maintaining cleanliness, and reporting problems with appliances or plumbing. For this reason, a carefully drafted lease agreement is needed.

A lease agreement is a legal contract between a landlord and a tenant that provides the tenant with the legal right to live in a specific property for the lease period. As part of a properly drafted lease agreement, the parties will agree to the rent amount, additional fees for late payment, rules regarding pets and facilities, the duration of the tenancy, and other conditions before moving in. Both parties have certain legal protections based on the terms of the lease, which can prevent future misunderstandings. Also, neither party can modify the agreement after it has been signed without the prior written consent of the other party.

Using a lease agreement template can be an effective, time-saving, and risk-averse option to start with when you are ready for this type of contract. It includes all the standard lease terms and conditions, so you can just fill in all the required information and download a personalized lease agreement in minutes.

What Is a Rental Agreement

You have a request from a student who came temporarily to the city for exams to rent your apartment for 30 days. How do you ensure that both the tenant and landlord are comfortable with the conditions? A carefully drafted rental agreement is the right choice.

A rental agreement will give the tenant the legal right to live in the property for a short period of time. This time typically renews automatically at the end of each fixed period. Tenants and landlords usually have a rental agreement that runs on a month-to-month basis. As a result, both parties benefit from legal protection that can help to prevent misunderstandings and potential risks in the future.

Differences Between Lease and Rent

You have asked what’s the difference between renting and leasing? Although both leases and rental agreements are legally binding documents that ensure the rights of both parties while renting a property, they serve different purposes, including the following: 

  • Lease agreements can apply to assets and equipment and properties, but rent agreements are almost exclusively for land or properties.
  • While a lease agreement covers a long-time period (usually one year), a rental agreement covers a short-term period (usually one month).
  • Typically, while the terms and conditions of lease agreements are predetermined, the terms and conditions of rental agreements may be changed after appropriate notice.

Thus, the terms “lease agreement” and “rental agreement” should not be used interchangeably.

Lease vs Rent on Infographics

Lease vs rental Agreement Table

This rent vs lease table explains in more detail the main differences of a lease vs rental  agreement: 

Lease Agreement vs. Rental Agreement: Pros and Cons

Leases and rental agreements have both pros and cons a person should consider before making a final decision on which document is needed. 

Pros of a Leasing

  • Stability—The lessee has the right to stay in the home throughout the duration of the long-term contract. This provides stability and confidence.
  • Fixed rent amount—The landlord can’t change the rent amount to be paid every month. Once both parties have signed the lease, they are locked into the monthly rent outlined in that agreement.
  • Trustworthy relationship with a lessee—There is time to build a trustworthy relationship with the lessee and an opportunity to feel confident about the proper maintenance of the property.

Cons of a Leasing

  • Less flexibility—After signing a lease, the parties have no right to change the conditions. This can become a con when, for instance, the average rent in the area suddenly decreases, but the lessee must pay a higher rent amount than other renters nearby.
  • The process of moving can be postponed—Unfortunately, leasing an apartment is a longer process, and if the lessee faces sudden life changes, the terms of a long-term lease must be met before he or she can move. 
  • Consequences for breaking a lease—There are consequences for breaking a lease, both for the lessor and the lessee. Check the terms of the lease before signing to learn what the consequences are for early termination.

Pros of a Renting

  • Rent adjustments—Rent can be changed monthly to keep in line with the current fair market rent. The tenant must be aware that a rental agreement gives the landlord the right to raise the rent amount every month.
  • Easier to move for major life changes—Unlike a lease agreement, a rental agreement can accommodate unexpected life changes that may require the tenant to leave the area.
  • More negotiation opportunities—Renting gives the tenant a chance to renegotiate some terms of the contract, including asking the landlord to allow the tenant to have a pet.

Cons of a Renting

  • Less stability—Unlike a lease agreement, rental agreements are shorter term and may not be renewed if the tenant needs to move for any reason or if the landlord prefers to find another renter.
  • Unstable income—The landlord may experience difficulty finding new tenants for short periods of time.
  • Security issues—Although a person may seem trustworthy, there is no time to learn everything about the tenant during short-term rentals. However, to increase security, a properly drafted legal agreement is a must-have.


It is clear that leases and monthly rental agreements have their own advantages and disadvantages. When you know what the difference between rent and lease is, it becomes apparent that these documents cannot be used interchangeably. No matter what kind of agreement you offer your tenants—leases or rental agreements—you need to know everything that is in them to help protect your legal rights. You can get confidence from carefully drafted and thoroughly proofread legally binding agreements.

Article by Sofi Ostymchuk

Sofi Ostymchuk is a Content Lead and Legal Writer at Lawrina. Sofi manages the content on the blog, communicates with contributors, looks for interesting topics, and creates articles in cooperation with lawyers and law experts. If you would like to be a blogger for Lawrina, you can contact Sofi for all the details via email at

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