Should I lease or rent property?

Sunday, May 19, 2019

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It would surprise many people to hear that the terms lease and rent, while alike, do not mean the same thing, particularly as it relates to real estate. And though there are similarities that allow access to and use of a property, it's the differences that one should be cautious of.

Dawn Ruddock, realtor and broker associate, and realtor associate Lystra Sharp at Coldwell Banker Jamaica Realty help us to shed light on the issue.

“Although at times the terms are used interchangeably, there is a difference between leasing and renting,” said Ruddock.

“Leasing is a long-term contract/agreement which may or may not give an option to terminate before the lease period ends.

“Renting, on the other hand, is an agreement on a month-to-month basis,” Ruddock informed 876 Listing.

While that distinction may not seem great, it could be the difference between great savings or loss if one is seeking property as a lease oftentimes allows more flexible negotiations if the potential lessee/occupant is looking at a long-term arrangement that the lessor/owner finds agreeable.

“As realtors, we get more requests for leases,” Sharp said, adding that the financial implications allow better planning financially as “under a lease agreement as there is more certainty for both parties. The lessor expects income in a timely manner and over a longer fixed period. The lessee is aware of his or her monthly obligation for this period.”

Maintenance is often of great concern in any agreement, whether renting or leasing, as these expenses can add up and make a property more costly than initially thought. However, under a lease agreement these costs are usually borne by the lessor/landlord.

As leasing is long-term and may span anywhere from a few months to a year, or even longer, this could mean an issue arising after the agreement made may go unaddressed if not covered in the paperwork. However, there is still hope for recourse. “Yes, changes can be made to either agreement once signed if there is mutual consent by both the lessor and the lessee”, said Ruddock. “This may be reflected in an addendum (addition) to the contract/agreement and signed by both parties.”

Once the end of a lease agreement nears, both parties may agree to extend it or go their separate ways. An extension of the agreement is also an opportunity to renegotiate the terms, for example, should a lessor/landlord want to increase the rent.

Whether you lease or rent, it is important to have a good understanding of what your obligations will be and what options are available should you need to make a change or adjustment regardless of what side of the agreement you fall on.

— Paul Allen

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