Terms to Understand

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What is Rental/Lease Agreement?

The lease or rental agreement of any residential or commercial building is the key documentof tenancy which outlines important issues of occupancy such as the length of tenancy,amount of rent and deposits the tenant must pay,responsibility towards payment of utilities,whether the tenant may sub-let the property, the landlord’s access to the property and the fixtures which the tenant may have right to alter etc.

Very often the terms are misunderstood. An agreement must necessarily be in written, as oral agreements may often result in a dispute.

what is the difference between Rental and lease agreement ?

The biggest difference between a rental and a lease agreement is the period of occupancy. A written rental agreement is usually for a very short duration, and is automatically renewed after the end of the period, unless the landlord or the tenant ends it by givinga written notice, typically within a period of 30-60 days.

For the month-to-month rentals (i.e. if the rent is being paid monthly) the landlord can change the terms of the agreement through a proper written notice, subject to any rentcontrol laws. A written lease agreement, on the other hand, gives the right to occupy a rental unit fora set term, if the tenant pays the rent and complies with other lease provisions. Unlike a rental agreement, a lease agreement does not get automatically renewed when the lease period expires.

Also, during the fixed term of the lease, the landlord cannot increase the rent or change other terms agreed upon in the lease, unless the changes are specifically provided for inthe lease, or if the tenant agrees.

What is Leave and Licence ?

Leave and licence is just a licence to make use of the premises of a rented accommodation. The licensee is not a tenant. Thus the protection which is available to a lessee is not available to a landlord as he does not have much hold on the lessee.

If there is no written or registered agreement, the contention of the licensee with regard to the terms and conditions of the agreement on which the licence is granted shall prevail unless it is proved otherwise

How different is leave and licence from lease?

In the case of a ‘lease’, the rights in the property and right to enjoy the property are transferred to the lessee, whether for a specified period In the case of leave and licence, there is only a licence to use the property and all rights are reserved by the licensor.

Can a tenant break a lease agreement?

A tenant cannot legally break a lease agreement unless the landlord significantly violates its terms – like failing to make necessary repairs, or by failing to comply with an important law concerning health or safety.

A few States also have laws that allow tenants to break a lease, because of health problems or a job relocation, which may require a permanent move. A tenant who usually breaks a lease without a good cause will be responsible for the remainder of the rent due under the lease term.

Article Collected from: The Hindu News Paper.Dated: 17/05/2008