Lease agreements and rental agreements can be easily confused with one another and frequently get used interchangeably. Rental agreements, commonly known as “month-to-month agreement”, is for an indefinite period of time, with rent typically payable on a monthly basis. The tenancy is automatically renewed at the end of this period unless either the landlord or tenant gives proper notice (usually 30 day advance notice) to end it. With a month-to-month rental agreement, the landlord can change the terms and rules or raise the rent with proper notice for the tenant. This arrangement provides significant flexibility to both landlord and tenant, as either is free to change the situation on a month-by-month basis. On the flip side, however, this means that neither party has very much security; the landlord might have to find a new tenant on a month’s notice if the tenant decides to move out, and the tenant may have to find a new residence if the landlord decides to raise the rent.

A lease agreement, on the other hand is signed for a set term (often six months, a year or longer). Unlike a rental agreement, the landlord cannot change the terms of tenancy or raise the rent without both parties’ agreement. A lease agreement contains mutual covenants, i.e promises that must be fulfilled by both parties, such as the landlord’s promise to deliver quiet enjoyment of the premises in return for the tenant’s promise to pay rent timely. Also, in a lease agreement the lease is not typically renewed when it expires. While this arrangment provides lfor ess flexibility, it also provides greater security to both landlord and tenant. With the assurance of a signed, written lease agreement, both parties can rest easy knowing they have continuing rights in the premises that can be protected and enforced by the law.

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