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What Is a Rental Agreement?
A rental agreement is a legal document describing the arrangement between the owner of real estate and another party who will pay rent in exchange for permission to occupy the property.
The owner of the real estate is also known as a "landlord" or "lessor." The party paying rent is known as a "tenant" or "lessee."
This type of agreement is a contract documenting the use of a space, either residential or commercial, for a fixed period of time in exchange for rent. The landlord and tenant can negotiate the terms of this contract. Once both parties sign the agreement, however, it is considered legally and mutually binding.
You may also encounter a rental agreement referred to as the following:
What Is the Difference Between a Rental Agreement and a Lease Agreement?
Although the terms are often used interchangeably, a rental agreement and lease agreement can legally refer to distinct types of agreement documents. Both rental agreements and leases are legally binding contracts between a landlord and a tenant or tenants.
A rental agreement has the following characteristics:
A lease agreement has the following characteristics:
The biggest difference between a rental agreement and a lease is the period of time these documents typically cover. A lease generally covers a longer period of time, for example, six months or 12 months. A rental agreement covers a shorter period of residency, usually 30 days.
Common mistakes in a rental agreement
It is usually observed that the parties make the following mistakes in the rental agreement:
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