Should You Use A Lease Or A Rental Agreement – Part III

By E-Renter Tenant Screening
Posted on March 3, 2007 under Landlord Tenant Lawsuits | Be the First to Comment

Lease or rental agreements are key elements of a landlord / tenant relationship, as they help to maintain and establish the code of conduct, each has to uphold for a civilised relationship. However, there is a difference between lease and rental agreements, explained as under:

Rental agreements are drawn up for short-term tenancies, usually a month. They are month-to-month agreements that are automatically renewed each month, unless of course, the landlord or tenant terminates the agreement, usually by giving adequate notice adhering to an appropriate time-frame for termination of a rental agreement, which is typically 30-days. As well, these agreements allow landlords to raise rents, change tenancy terms, or terminate the agreement on relatively short notice i.e. usually 30 days, unless local rent control ordinances specify, otherwise.

On the other hand, a lease is a binding landlord / tenant relationship set for a fixed period of time, usually a year. During this time, no rental increases are permitted, nor is a landlord entitled to change the terms of the lease, unless and until it runs out. As well, if the lease itself has a clause that provides for modifications or the tenant agrees to the changes in writing, then and then only can a landlord amend any lease terms. In addition, if there is a falling out between the landlord and tenant, the former cannot ask the latter to move out, unless the tenant has not paid the rent, despite repeated notices, or has violated an important lease term, or state or local law. Only when the lease comes to an end, can he / she either terminate or renew the lease or rental agreement.

As to which one is better? That depends on what a landlord’s priorities are, as there are many with a decided preference for month-to-month agreements, particularly in tight rental markets where tenants are aplenty and rents are always tracking an upward curve. Flip the coin and you will find month-to-month tenancies guarantee a high rate of tenant turnover, which means more work to keep rental properties full.

Whereas, leases are preferred in high vacancy areas, or where certain seasons of the year mean it is difficult to find any tenants e.g. college towns that wear a deserted look in summer that is vacation time in educational institutions.

That apart, landlords should make themselves cognisant with all rules and regulations before drafting a lease, and must take all necessary precautions, such as, screening tenants and conducting background checks on prospective tenants, including ensuring all promises in the rental lease are adhered to, as their insurance for a litigation free landlord / tenant relationship. A simple click of the mouse and any landlord or property manager can visit www.e-renter.com for tenant screening and background check services. www.e-renter.com, the best tenant screening agency in America!