The difference between lease and rent

June 27, 2022

It is not uncommon for people to believe that renting and leasing are the same thing, unfortunately as similar as they might be, there is a distinction between the two.

A lease is a contract between a tenant and a landlord that gives a tenant the right to occupy a property for a fixed period of time. A rental agreement, on the other hand, is quite similar to a lease agreement, however, the main distinction between both is usually the length of the contract. A lease is usually fixed for a specified period while a rental agreement is considered a month-to-month contract and is continued upon the payment of the rental amount.

One of the advantages of leasing is that it offers stability for both a landlord and a tenant due to its certainty. The landlord can be certain that their tenant is contractually bound for a certain period, while a tenant can operate freely knowing that as long as they do not breach the lease agreement then they are guaranteed that stability as well.

As it relates to a lease, one of the good things about this agreement is that the landlord cannot raise the rent for the duration of the contract. Once you've signed a lease, you're locked into a fixed amount for a fixed period.

There are disadvantages, however, to the use of each agreement. A lease, for example, offers little to no flexibility due to the fact that both the landlord and the tenant binds themselves in contract for a fixed period for a fixed amount. That means, if the price of rent should decrease, the tenant cannot benefit, and if the value of the property increases, the landlord will not benefit.

Due to the general nature of a lease, it usually requires a longer notice period in the event that one party wished to cancel, and in light of that, it is hard for a tenant to suddenly up and move. Due to the said nature, there are also legal consequences in breaking a lease such as forfeiting the security deposit.

The use of either contract has its advantage. Unlike a lease, a rental agreement allows you to rent for a short period, which is sometimes ideal for a person who will not require the premises for a long period. Also, because there is no legal obligation for a fixed period, it allows the tenant to vacate with a shorter notice period. For landlords, the same flexibility applies as they are not bound by the same long-term obligations and can serve notice to quit usually in a shorter time period.

Due to the month-to-month nature of rental agreements, each month allows either party to negotiate the terms for the following month. While you aren't going to be signing a new rental agreement every month, it does give you a chance to renegotiate some terms of the contract if you want, such as asking for the landlord to allow you to have a pet, mount a TV on the wall, etc.

It is clear that the main distinction between a rental agreement and a lease agreement is the time. Therefore, it is not surprising that a disadvantage is that a rental agreement offers less stability. Both the landlord and the tenant have the right to terminate upon notice any given month.

Due to the fact that the rental amount is not fixed for a specific period as well means that a landlord can increase the rent on any given month. Luckily, however, tenants in Jamaica are protected by the Rent Board and landlords can only raise rennet by 7.5 per cent annually, with the permission of the Board.

Odane Marston is an attorney-at-law who specialises in conveyancing, administration, probate, recovery of possession, criminal litigation and divorce. He may be contacted via email Odanemarston@gmail.com or star@gleanerjm.com

This article is for general information purposes only and does not constitute legal advice.

Other News Stories