Difference Between Lease Agreement and Rent Agreement


A rent agreement implies a brief arrangement between the landlord and tenant, whereby the tenant pays the rent in exchange for the right to use the landlord's property, such as a piece of land or an apartment. On the other hand, a Lease agreement is signed by two parties and states that one side is allowing the other to use the movable asset for a predetermined amount of time. Although they are two different types of contracts, renting and leasing are frequently confused.

Property leasing differs from property renting. An entirely different tenancy arrangement will be revealed if we compare the two legal processes. The length of the tenancy and the amount of the rent appear to be two important differentiators, even though a tenancy is established by a lease agreement or a rent agreement. Let's take a look at the difference between the 2 agreements. 

Lease vs Rent







According to Section 105 of the Transfer of Property Act, of 1882, this constitutes a contract that covers a longer time span. 

In terms of the characteristics and provisions, it is very similar to the Lease Deed. However, it is short-term.


Parties Involved


Lessor and Lessee

Landlord and Tenant

Accounting Standard


AS - 19

No particular accounting standard.



An average lease lasts for 11 months.

Typically, a rent agreement is month-to-month.


Security  Deposit

The security deposit varies for different states and cities. According to the Model Tenancy Act 2021, it cannot exceed 2 months’ rent. 

The rent agreement system also follows a similar pattern.



Mutual agreement is required for the renewal of a lease, and a new deed is registered to that effect.

When the monthly rent is paid, a rental is automatically renewed.





Lease rentals


Repairs and Maintenance


Depend upon the type of lease




The contract's conditions cannot be changed without the consent of the 2 parties involved.


The landlord has the right to alter or modify the conditions of the agreement.


Lessor is responsible for paying all taxes.


All taxes are paid by the landlord.



Once the deed is signed, no changes can be made.


The Landlord may make changes whenever they desire.



Overall, a lease agreement is a more formal and long-term agreement, while a rental agreement is more flexible and can be renewed on a monthly basis. It's important to carefully review and understand the terms and conditions of either agreement before signing.

It is crucial that you are aware of who your tenant is before you provide a lease or rental agreement. You can increase your assurance that you're renting to the right individual by thoroughly screening the candidates.