Definition
Lease vs Rent
Lease and rent both grant the use of a property for payment, but a lease is typically a longer, fixed-term contract while rent (a leave-and-licence) is usually shorter and more flexible.
A lease agreement generally locks both parties in for a longer fixed period with defined terms, offering stability but less flexibility; long leases may require registration and attract stamp duty. A rental or leave-and-licence arrangement, common for residential homes in India (often eleven months to avoid certain registration requirements), is shorter and easier to terminate or renew.
The distinction affects rights, registration, stamp duty and how easily either side can exit. Tenants seeking long-term certainty may prefer a lease, while those wanting flexibility favour shorter rental agreements; landlords weigh stable occupancy against the freedom to revise terms or reclaim the property.
Related terms
- Property RegistrationProperty registration is the legal recording of a property transaction with the government sub-registrar, making the transfer of ownership official and legally enforceable.
- Rental YieldRental yield is the annual rent a property earns expressed as a percentage of its value, measuring how much income the asset generates relative to its price.
- Security DepositA security deposit is money a tenant pays a landlord upfront, held as protection against unpaid rent or damage and refundable (less any deductions) at the end of the tenancy.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.