How many of us were aware that leasing and renting is not exactly the same thing? Thanks to their many similarities, it’s easy to assume that both the terms are one and the same. Until you enter into a leasing or rental agreement India, you will not be able to spot the subtle differences between the two concepts. Even though the two words are frequently used interchangeably, leasing a commercial space is not the same as renting it.
In this blog article, we aim to educate on some of the key differences between a ‘lease’ and ‘rent’.
Lease vs. Rent
A rent contract, a document signed between the tenant and the landlord to make the renting process official, can either be a lease or a license. Whether a tenancy could be carried out via a license or a lease agreement is fundamentally decided by the tenure of the tenancy.
Under the lease, the landlord is required to transfer the right to make use of the property, to the tenant for a specific period of time in return for the rent. Leasing is typically observed more in the commercial real estate space sector in India. On the other hand, a rental agreement India is regarded as a legal contract where the landlords give their property to a tenant for residential/commercial use for a shorter period.
Key Differences between Lease & Rent
Here are a couple of differences between leasing and renting based on the following factors:
Parties Involved: When you enter into a lease contract India, the parties involved are referred to as lessor and lessee, whereas in a rental agreement, the relevant parties are known as a landlord and tenant.
Time Span: A lease is generally agreed upon for a longer duration, i.e. 6-12 months or more as decided by both the parties. On the other hand, rent is for a shorter time frame, i.e. on a monthly basis or it can be up to 11 months.
Repair Expenditures: The monetary expense for maintenance and repairs has to be borne by the lessee whereas when it comes to a rental agreement, the tenants need to pay for this expenditure.
Terms & Conditions: In a leasing contract, the terms and conditions cannot be altered once they have been signed and agreed upon by both parties. Nevertheless, if both the lessee and lessor decide to revise some portion of the agreement they will have to get into a lease amending the contract. On the other hand, landlords can modify the terms in a rental agreement arrangement by giving a head’s up to the tenant.
To sum up, these are four key differences between leasing and renting a residential or office space in India. You can use CRE Matrix – a leading real estate data analytics firm in India – to give you a detailed breakdown of the leasing and rental status of numerous brands/companies across the country.
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