Lease vs. Rental Agreement. Which one to choose as a Tenant?

Lease vs. Rental Agreement. Which one to choose as a Tenant?

Different renters have different needs in terms of duration they will spend in the rented accommodation when they take an apartment for rent. For instance, some are remodeling their own house or some are looking for job opportunities in other cities, thus, the duration for which they need the rented apartment varies. Because you are staying in a paying guest in Delhi, and your tuition center or office is very close to this location, you cannot simply walk to the landlord and extend the duration just like that under a lease. But this would have been possible if you were staying on a rental agreement.

The relationship between the landlord and tenant is already considered as a complicated one and if you don’t clear out the choice for lease or rental agreement, then the problems will only aggravate.

Why should you consider a rental agreement?

The rental agreement is periodic in nature and is a month-wise contract between the tenant and the landlord.

What happens when a rental agreement expires?

When a rental agreement expires, three situations can happen:

  1. The agreement gets renewed automatically and payment becomes due.
  2. There are adjustments made to the agreement in the form of increase or decrease in the rental prices.
  3. The agreement ends with tenant vacating the rented premises with a vacation notice.

The rental agreements give more edge to the landlord than to the tenant. For instance, irrespective of current rent price the landlord could charge more from the tenant for he is there to stay for a short time.

However, for the renters who are looking for short-term rented apartments, the rental agreement seems to be a better option. So, if your office or educational institute which was very near to your PG in Delhi shifts, you can do the same provided you were staying on a rental agreement and you gave a proper notice to your landlord.

Why should you go for lease?

The lease gives a legal right to the renter to live in a space for a fixed time period. The minimum lease period is 12 months and it can be extended as per the understanding of the tenant and the landlord.

What are the benefits of the lease?

With a lease, both the renters and landlords are bound to follow the terms of the lease. For instance, the landlord cannot increase the rental price unless and until it is stated in the lease agreement. Also, the renters cannot vacate the rented house as per their choice without fulfilling the terms laid down in the lease agreement. The major advantage comes in the form of security which both the tenant and landlord get through a lease.

The Bottom Line

In the growing rental markets, the landlord prefers a rental agreement as finding a tenant for the house is not a problem. Even for the tenants who are looking for a temporarily rented space, the rental agreement is a better option.

For the tenants who are looking for a home-like space, where they are going to stay for a longer time period, a lease seems to be a better and safe play.