Rental Agreement

The rental agreement is a legal contract between the renter and the property owner. A renter is an individual who pays the fee to temporarily occupy the owner's property. During the time frame stipulated by the contract of rent, the tenant is allowed to live in or use the owner's property. 

Often known as a rent deed or lease deed, the rental agreement includes essential information about the residential property, the property owner, the tenant, the total duration of the renting period, and the cost of rent for that period. The terms and conditions outlined in the contract cannot be changed unless and until both parties mutually consent to them.

Some durations of the rental agreement contract include the following:

1. Flexible Terms: These agreements may be implemented for any length of time based on the parties' specifications, and they may be renewed according to their provisions. 
2. Month-to-Month: Some contracts have a month-to-month duration, which gives the renters flexibility in case they require a temporary place to live or have unstable plans.
3. Fixed-Term Leases: Several agreements include fixed-term contracts that usually last six months, a year, or more. They offer stability to everyone involved for the stipulated timeframe.

The rental agreement procedure is as follows:

• First, both parties must gather the required paperwork, including proof of identity, evidence of property ownership, and details of the agreement. 
• Then, they must visit the office of the local housing or municipal body in charge of the agreement registration.
• Next, the concerned parties must provide along all the necessary paperwork and a copy of the contract for inspection. 
• Then, they must pay any applicable registration fees. These payments may vary depending on the contract's terms and local laws. 
• The officials may carry out an investigation procedure to ensure adherence to the local rules and regulations.
• The concerned parties must pay any additional stamp duty that applies to the agreement if required. 
• Finally, upon proper verification and payment, they can obtain an acknowledgment or a stamped copy of the registered agreement.

Let us go through the following examples to understand this agreement:

Example #1

Let us assume that Jenny is a property owner who wishes to rent out her apartment. Amy approached her, and they mutually agreed upon a set of terms and conditions pertaining to the rental arrangement. They drafted a legally binding contract that included all the established terms and conditions. Furthermore, it contained essential information about Jenny and Amy. This is an example of rental agreement.

Example #2

Due to a shortage of available properties, renters in Australia have to deal with rising rent prices. Tenants have been posting stories of their rent hikes on social media groups as the rental market has tightened. That being said, there are specific regulations that govern when a property owner can raise the rent. For instance, in the state of Victoria, if a renter is on a fixed-term agreement, the rent cannot be raised unless stated explicitly in the contract. Even if it does, a written notification of sixty days must be provided. This is another example of rental agreement.

This arrangement can be terminated with one to three months' notice. Any party may terminate the rental agreement, and after the notice period has passed, the renter may leave or be ordered to leave the premises. However, providing a notice of termination for leaving the property prior to the expiration of the agreement is essential. Upon leaving the property on the expiration date of the agreement, there is no requirement for announcing or notifying the termination.

The importance of the rental agreement contract is discussed below:

• This agreement provides an in-depth description of the terms of the rental contract, which helps eliminate misunderstandings between landlords and tenants. 
• It helps establish the terms of each party's rights and responsibilities. 
• The agreement helps in establishing a framework of accountability for the duration of the arrangement.
• Property owners can safeguard their property by leveraging the agreement to set rules for usage and address ways to preserve it.
• Tenants use the agreement to ensure that they have the right to occupy the space and that the terms specified in the agreements are fulfilled.
• Property owners and tenants have an object of reference in case of legal proceedings. It assists in providing evidence of the accepted provisions of the arrangements. 

The differences are as follows:

Rental Agreement

• This agreement is often on a monthly basis and is not an agreement for a lengthy period. 
• The parties concerned agree that this month-to-month agreement will be renewed every month after it expires.
• Either the landlord or the tenant may modify the provisions of the contract at the end of every month. The landlord has the choice of increasing the rent or requesting that the tenant vacate the premises without breaching the contract by providing an appropriate 30-day notification.

Lease Agreement

• A lease agreement is a binding agreement between a landlord and a tenant that involves the leasing of property for an extended period, generally 12 months or longer. 
• The lease agreement contains all the information required to ensure the protection of both parties and is quite detailed in outlining their obligations during the agreement's term.
• The duration of the contract and the amount of rent paid every month are fixed and cannot be revised. It ensures that the owner cannot abruptly increase the rent, and the tenant may not leave the property anytime they want without facing consequences.