KEY DIFFERENCES BETWEEN LEASE AND RENT

Lease

Leasing is a contractual arrangement whereby the lessor (owner of the asset) gives the possession and conditional ownership of his property to the lessee (user of the property) for a definite period in an exchange for a mutually agreed periodic payment. In contrast, rent is a contract wherein the possession of the property is transferred by the owner or the landlord to the tenant. In a rented property, the ownership remains with the property owner or the landlord.

Rent

Letting the property at rent, to another person for a short term is known as Renting. The term of the rent goes on extending, month to month until the parties mutually decide to end up the agreement. Usually, the term of the rent is less than a year. Rental Agreement is an agreement in which the conditions of rent are defined. The agreement may either be oral or written.

Landlord and Tenant are the two parties to renting. The landlord has the right to raise the rent or modify the terms of the agreement, by giving prior notice to the tenant, in written form. Such an arrangement is appropriate for the tenant when the asset is required for a limited period only as the renting cost is high. So, the company can hire the asset on rent only when it is required.

Key Differences Between Lease and Rent

BASIS	LEASE	RENT
Meaning	The arrangement where the lessor gives the possession of his property to the lessee.	The arrangement where the owner allows the tenant to use his property for a definite period of time.
Accounting Standard	AS – 19	No specific Accounting Standard
Duration	Long Term	Short Term
Parties	Lessor and Lessee	Landlord and Tenant
Consideration	Lease Rentals	Rent
Repairs and Maintenance	Depends upon the type of lease	Landlord
Modifications	The terms of the contract cannot be modified until it ceases to exist.	The terms of the contract can be changed/modified by the landlord.
Offer to buy	At the end of the lease term, the lessee might get an offer to buy the leased asset in exchange of the remaining amount.	No such offer.