Leasing or renting? Know the difference and what’s better for your property

As a landlord, you know that different tenants vary in their housing requirements, including their interior design choices.

Now, the terms rent and lease are used interchangeably. However, leasing a property is not the same as renting a home. Of course, the lease rent meaning includes renting accommodation. On the other hand, rental agreements are categorized further into lease contracts and leave & licensed ones. No doubt, the terms and conditions of the lease agreements and leave & licensed ones differ in various aspects.

Yes, both terms refer to two different kinds of arrangements. Of course, both lease agreements and rental ones are legally binding. Even so, if you talk to companies offering property maintenance services, they will tell you they serve different purposes.

Now, depending on your requirements, you should opt either for the rental agreements or lease one. Even so, you must first understand the difference between lease and tenancy.

What is a lease agreement?

The definition of a lease is defined under Section 105 of the Transfer of Property Act 1882. Under this Section, the rent management professionals will disclose that the lessee has rights to enjoy a property for an agreed-upon price, or something of value, paid periodically. Also, the lessee has to pay the landlord as per the terms of the contract.

Rent agreements qualify as leases if they fulfill the below-listed conditions.

  • The landlord transfers the rights to use a property to the tenant.
  • The arrangement is valid for a stipulated duration or perpetually.
  • The tenant must pay the landlord monthly in exchange for the transfer of rights to enjoy the property. Instead of cash, both parties can also agree to the tenant paying via rendering a service or anything that holds value.

Under lease agreements, landlords agree to let out their property for a long duration; the time ranges from 3 years and goes up to eternity.

The rental property management experts will also reveal that a lease agreement must be signed and stamped, and registered. After registration, terminating lease agreements is not easy.

What is a rent agreement?

Rent agreements with a validity of 11 months come under leave & license contracts. Also, upon consulting the rental management specialists, you will know that such agreements are not valid under the rent control laws.

Different states vary in rent control laws; only rent agreements with a minimum of 1-year validity come under the purview of such laws.

The Property management company in Delhi will also explain that owing to the rent control laws. Landlords may not find it easy to review rents and remove tenants.

Key Differences between lease and rent

Here we discuss the lease vs. rent house agreements.

  • Parties

The parties in lease agreements are the lessee and lessor. Landlords and tenants are the concerned parties in rental contracts.

  • Type of Contract

As seen earlier, rent agreements can be either a lease or a leave & license contract. Nonetheless, rent agreements come under leave & licensing arrangements and not lease ones.

  • Ownership

Whereas lease agreements give ownership rights to the lessor, rental agreements retain the ownership rights with the landlord.

  • Responsibility for maintenance works

Under lease agreements, the lessee holds the responsibility of maintaining the property. The tenant is responsible for the property maintenance works in rent-based contracts.

  • Time

Lease agreements have a long duration, rent agreements, short periods.

What is a leave & license agreement?

The leave & license agreements are detailed under Section 52 of the Indian Easements Act 1882. The Property management services Gurgaon companies will further clarify that under leave & license agreements, the owner has legal possession of the property. Simultaneously, the licensee is allowed to use the premises for specific purposes.

To avoid legal hassles, most landlords and tenants enter into rent agreements valid for 11 months. An 11-month rent agreement, working as a leave and license contract, is not reasonable under the rent control laws. The laws apply only if the rental period is more than a year.


So, we have seen how rent and lease agreements vary. A property management company in Delhi NCR will recommend going by your needs when you’ve to choose between both options.

If you’re looking to rent a home for a short duration, you may want to consider the rent agreement option. Here, besides greater freedom, you can also terminate the contract whenever you want.

According to the companies providing NRI rental property management services, lease agreements are more common in the commercial real estate sector, where the process is more formalized.

contact@theluxia.com |   +91 9810505543