Rent / Lease
Reshma K
(Querist) 28 November 2009
This query is : Resolved
hi, Can you help me understand the difference between Rent agreeement and lease agreement or both the same.
Scenario / Question 1: For example in Bengalure, when I take a house saying I want it for rent, I pay 10 months advance of the month rent amount and then pay monthly rent. What is this - is it lease, rent - pls clarify.
Scenario / Question 2 - Again in Bengaluru (may be other cities also) we have an arrangement where in we pay for example Rs 3 lakkhs in the begining and stay for 1, 2 or 3 years and no periodical payment and when we leave the entire amount is paid back. What is this?? Poople generally call this as lease?
Question 3 - In Secion 105 of the TP Act there is mention of Price and then of Rent. What is the difference. Can you pls explain with an example the difference between the two.
A V Vishal
(Expert) 28 November 2009
The fact is most states only allow a oral contract between the tenant and landlord to be legal for a short period of time, because oral contracts often go to court it is necessary to have a written lease or rental agreement. The rental or lease agreement is used to specify the length of tenancy, the amount to pay, the number of people living on the property, pets, who pays utilities, whether your allowed to sub lease the property, when the landlord can access the property, and who is responsible for paying attorney fees if there is a lawsuit.
The difference between a rental agreement and a lease agreement is a rental agreement is automatically renewed (usually on a month to month basis) and the landlord can change the terms with "proper written notice."
A lease agreement is only for a set term, usually 6 months or more. The lease agreement allows the tenant stay on the property as long as he/she pays the rent and complies with the terms. A lease agreement does not automatically renew itself.
sanjeev murthy desai
(Expert) 28 November 2009
Dear Reshma. K
There is no difference between lease/rent
under indian laws.
Scenario / Question 1: For example in Bengalure, when I take a house saying I want it for rent, I pay 10 months advance of the month rent amount and then pay monthly rent. What is this - is it lease, rent - pls clarify.
Yes offcourse it is lease.
Scenario / Question 2 - Again in Bengaluru (may be other cities also) we have an arrangement where in we pay for example Rs 3 lakkhs in the begining and stay for 1, 2 or 3 years and no periodical payment and when we leave the entire amount is paid back. What is this?? Poople generally call this as lease?
Its not lease nor rent. But traditionally people calling Lease but legally it is one kind of Mortgage.
Question 3 - In Secion 105 of the TP Act there is mention of Price and then of Rent. What is the difference. Can you pls explain with an example the difference between the two.
Rent is whatever lessee paying periodially up to lease period i.e., rent.
Price means whatever lessee pay the security deposit on the subject lease that amount considered as price.
Raj Kumar Makkad
(Expert) 29 November 2009
Definitely Sanjeev have replied the desired replies to the quarry accurately.
Suhail suhail
(Expert) 30 November 2009
WEll the majority view of my learned brothers is in agreement with the reply laid down by My learned friend Mr.Sanjeev.
But i am not in agreement with the explanation laid down by Mr. Sanjeev.Mr. vaishal has placed an answer to the point.Since their is much difference between Rent and Lease,rent is different from lease,as mentioned by Mr. Vaishal it is in fact the situation in correct legal perspective,if the rent agreement is for a period of 11 moths there is no need to register it under Registration Act and the agreement is reduced into witting for the terms and conditions of tenancy,the relationship is made as tenant and land lord,but if the period of rent is for more that a year the document is to be registered.When i was in Bengalure i observed huge litigation between landlord and tenants,and for that purpose the eviction was to be sought from the court,and the grounds differ and litigation was going on for years altogether.-However the mode of making payment depends on and as per agreed terms it could be paid in advance as a whole, or partly in advance and rest by periodical rentals.
Lease is different from rent as if a property is leased the amount agreed to be paid for lease period is as per the terns of lease,the relationship is that of lessor and lessee.Let me put it like this,if you want to drive a vehicle you need license to drive and till the license is valid you can drive the mentioned vehicle for which license was issued,you are licensee,but once the license expires you and you did not applied for its renewal you are barred to drive the vehicle and it is to be born in mind that if license expired the very next day you have to be away from driving till your license is not renewed,be it that you are trained driver and driving from a decade,that does not qualify you as a driver to drive the vehicle on road it is an offence.Similarly in a eased property you are licensed to use the property till the date of lease period,once the lease expires one is barred from using the property and if the lease is not renewed you loose every right to use the property.
It is as placed by Mr. Vaishal about the term renewal.So a tenant can stay even after the period of tenancy is over but a lessee does not have any right to stay a single day upon the period of lease is over.
That is why the lease is preferred by the owner instead of tenancy.
Reshma K
(Querist) 01 December 2009
Dear Sanjeev, Thanks a lot for your answers. I have a few clarification to understand it better.
1. So in the case of Lease/Rent are there some standard requirements. I mean, is it compulsory that there shoudl be a security deposit to be paid at the begining. If yes, is there is a set amount?
2. Does the payments have to be made monthly. Can it be once in two months etc?
3. In a lease agreement, there is usually a cluase saying that agreement can be terminated by notice by either side? Is there a set period of notice or are the parties free to decide what shoudl be the notice period?
4. Another important question i have is, since lease can be terminated by notice period usaully with a months time, Is it really required to have an agreement that the lease is for 11 months, 1 year or two years. Can we not just say or rather shouldn't it be that the agreement is on monthly basis, since in effect it means the same. Becuase even it is for 11 months or more, the tenanct will have to leave after receiving the notice.
4. Sanjeev, I am still not clear with the difference between price and rent. You seem to be saying that Price is the security deposit. Is that so. Then are you saying deposit is compulsory in every lease agreement?
Reshma K
(Querist) 01 December 2009
Dear Bilal, thanks a lot for your answer. I have a question based on your answer.
In both cases, you have maintained that there is differenc. So in both cases, after the expiry of the period the tenant is required to quit. May be in the case of Lease, no notice is required, in the case of rent notice is required. But there is no right in either case to continue after the period??? so how do you explain this??
