What Are The 3 Main Types Of Lease?

It is important for those who are planning to rent a flat to know that it is essential to sign a lease agreement. Before you take this step, it is useful to learn about the different types of lease agreements for flats, especially about which type the landlord will provide for you to sign. There are a number of significant differences between each type, and knowing which ones are what can be useful.

The type of lease agreement that comes with the flat may not seem so important when compared to the amount, the monthly rent or the number of rooms. But it is actually very helpful to understand and know what kind of document you are signing and what it entails in the future.

The Concept of a Lease Agreement

A lease agreement is an essential part of the rental process because it protects both the landlord and the tenant during the term of the lease.  The type of rental agreement is usually determined by the landlord, so it is important to use the one that best suits the landlord himself. However, the parties can make changes to it as they sign it. 

Lease agreement is a legally binding document which gives the tenant the right to live in the landlord’s property for a fixed period of time. The classic lease period is between six and twelve months. The template for this agreement has an almost identical basic structure to the commercial lease agreement template, but there are still some differences that are worth considering.

Residential leases are agreements with tenants that clearly and in detail define the relationship between the landlord and the tenant, including the rent, the rules governing the use of the accommodation, the possibility of keeping pets and the length of the agreement. A strong, well thought out and drafted lease contract can help ensure that the interests of both parties are protected as neither party can change the agreement without the written consent of the other. 

You can either draft the agreement yourself if you have some knowledge of the law, or you can use the services of a qualified lawyer. But the second option will require an additional financial investment. An alternative option is the lease agreement template, which can be easily found on the Internet today.

It is worth mentioning that a lease agreement is automatically invalid if it contains any provisions that are not in compliance with current legislation. The use of ready-made lease agreement templates saves a lot of time and money, and at the same time creates an atmosphere of security for both parties.

Main Types of Flat Rentals

There are four different types of lease that can be offered to tenants of rental properties. The type of rental agreement that is signed can have a big impact on the rental experience. It can become positive or negative. It all depends on whether the document is drafted correctly and clearly. It is important to make sure that you understand and know exactly what type of agreement you are agreeing to before you put your signature on the document, as you won’t be able to change it later on. Let’s look at the key types of lease:

  • Monthly. This type of lease is automatically renewed monthly until the landlord or tenant gives 30 days’ notice of termination. It is ideal for short-term rentals or landlords wishing to fill the rental property for a short period. There is an option here to terminate the agreement at any time without penalty, provided you give proper notice. An ideal option for those looking for temporary accommodation. But there is a major disadvantage for the tenant – the landlord can cancel the lease or increase the rent with proper notice. And for the landlord, the situation is identical – the tenant can move out at any time.
  • Short-term. It lasts for a period of three to six months and is also a good option for landlords wishing to rent out their property to tenants for a short period of time. The landlord can expect a more steady stream of income than a monthly lease, but short-term leases often do not automatically renew unless required by the tenant. 
  • Long-term. A fixed-term lease, also called a long-term lease, and is usually between 12 and 15 months. Often, the length of time specified is determined by the landlord. Most landlords prefer this type of lease because it offers a stable income over a longer period of time compared to short-term options.

A 12-month lease is usually standard. In cases where the landlord wants to rent out the property temporarily or sell it in the near future, short-term leases may be a better option. 

It is worth pointing out that not only real estate but also machinery, specialized services and vehicles can be leased. For the latter, you can also use a car lease agreement sample.

You can quickly draw up lease agreements with the help of the well-known PandaDoc platform. It contains an extensive digital library of various documents, including a room lease agreement example. It clearly and competently spells out all the main points, and the parties only need to enter details of cost, personal details, or add any additional points that they have agreed upon. This is a very convenient and affordable option, especially when you do not have the money to pay a professional lawyer.