What are the types of Rental Agreements and which one you need?

whicch rent agreement is suitable for you

Background:

In certain cases, there can be a situation where a person has some additional flat or house, which he is willing to sublet to someone else, who is looking for such a facility. This kind of arrangement involves a person allowing another person to use his facility, without making him the owner. This kind of arrangement creates a situation of rent or lease and establishes a relationship between two parties, which is protected by the rental agreement or lease deed, as the case may be.

What is a rental agreement?

A rental agreement is a legal agreement between one person (landlord of a property) and the second person (tenant) who desires to have temporary possession of the property. In Rental Agreement the landlord rents out his property to the tenant for a given period of time against payment of a mutually agreed amount. To ensure that there are no disputes later, an agreement is made, which contains the basic details of the parties, the property, the term of the rental,the amount of rent for the term, andall other agreed terms and conditions. This agreement is executed on stamp paper along with the applicable stamp duty.

Types of Rent Agreement:

Often people get confused between the terms like rent agreement and lease agreement, and use them interchangeably. However, there are certain differences between these terms. In addition, there are some more different types of agreements, which are explained below:

 

  1. Lease Agreement:

    Before a tenant moves into the rental properties most landlords insist on signing a lease agreement. A lease agreement is actually a contract that creates a relationship of landlord and tenancy between two people, where the landlord gives the tenant a right to live in a property for a fixed period of time, which is usually 11 months. A contract between the landlord and tenant binds both the parties to follow the agreement.

The residential lease agreements define various terms, conditions, and even expectations between the landlord and tenant in terms of the rent, date of payment of rent, and duration of the agreement. Also, the landlord can mention rules regarding the use of pets, cooking non-veg food in the kitchen, or any other clause they feel important.

 

  1. License Agreement: 

    When a person wants to use a brand, patent, or trademark, which is owned by some other person, he/she cannot do so, without the written permission of the original owner. In case, you want to make regular use of such a brand of patent, then it is better to sign a license agreement.

The license agreement is actually a legal, written document agreed and signed between the two parties wherein the owner of the property (called the licensor) gives permission to another party (called the licensee) to make use of their brand, patent, or trademark. To ensure smooth conduct, both parties sign an agreement, which details the product in question, terms of usage, and how the licensor would be compensated in case of violating terms covered under the License Agreement. Depending upon what is being licensed, the contract types may vary. A license agreement helps in avoiding potential disputes related to sales, issues of quality, and royalties.

 

  1. Long Term Lease:

    As the name suggests, a long-term lease entitles the lessee the right to use the property for a longer period of time. However, the definition of ‘longer period’ varies with the specific asset being leased.

For example, in the case of commercial property, a long-term lease means a lease period from 10 years to 99 years, likewise in the case of residential property, a lease of more than a year is considered long. During the tenure of this lease period, the lease rental and other terms are fixed, and cannot be changed till the end of the lease period.

Long-term lease agreements are rigid and do not offer any flexibility to make any further amendments. And in case, if either of the parties cancels the long-term lease before the agreed period, they have to pay a significant amount as penalties.

 

  1. Short Term Lease: 

    Contrary to the long-term lease, a short-term lease is for a small duration, which is less than 6 months. A short-term lease maybe even as short as for a month, or even a week. So, when you are relocating to a city for a temporary period, or not sure about your length of stay, a short-term lease agreement is better.

 

  1. Commercial Lease:

    Renting a property with the intention of residing can be executed by way of a Residential lease agreement. However, if the property is taken with the intention of running a business, then the lease is called a Commercial Lease. ThisCommercial Lease agreement isslightly more complicated and detailed as compared to a Residential Lease.

 

  1. Tenancy Agreement: 

    The tenancy agreement is a contract between the landlord and the tenant, which details the expectations and deliverables of both parties during the time a house or flat is occupied. The Tenancy agreement guides the behavior of the landlord and the tenant during that specific period.

How can Contract Bazar Help?

Contract Bazar can assist you in drafting a well-thought-out, and well-written lease contract, without involving a lawyer. Such an agreement will help in preventing future squabbles and can protect the interest of both parties in the court of the law.

Contract Bazar makes it fast, easy, and affordable to reach an agreement. You can choose from several templates and make changes as per your requirements. You can mail, download or print instantly. If required, Contract Bazar can print the agreement on the requisite stamp paper, and deliver it to your home.

Conclusion:

These are the various types of rental agreements. So, depending upon your specific requirements, you may select the agreement that best fulfills your requirements.