A rental agreement is a contract (written or oral) under which a landlord allows a tenant to use and occupy its property for short time periods. Commonly, a rental agreement has a monthly duration to the extent it expires and is renewed by the parties each month. In exchange for the tenancy, the tenant makes the agreed rental payment to the landlord.
A written rental agreement should at least include the following provisions:
- Identification of the landlord and tenant.
- Identification of the property.
- Terms and conditions for the rental payment.
- Term of the duration of the tenancy, which commonly is one month.
- Terms and conditions for the tenancy.
- Liability rules for damages and repairs of the property.
- Rules for the termination and renewal of the contract.
Although lease and rental agreement are often considered synonyms and are almost identical in legal nature, they are two different types of contracts. A lease agreement is a long-term contract, whereas a rental agreement is not.
[Last updated in July of 2021 by the Wex Definitions Team]