The difference between a rental and a lease agreement: Simplifying the terms

Updated: Apr 14, 2020

After setting your priorities right and subsequently choosing your house or apartment within your desired neighborhood, the next step that follows will be signing and negotiating the lease or rental agreement with the landlord. It is important because it forms the foundation and basis of the contractual relationship between you and your landlord establishing rules, conditions, rights and responsibilities arising from such engagement.

A rental agreement is an agreement between a landlord and a tenant providing for a tenancy of a short period often one month (30 days) that is automatically renewed at the end of the period unless either party terminate or chooses to end it by a written notice. In other terms, this type of tenancy is also referred to as periodical tenancy where the landlord can change the terms after issuing the tenant with a reasonable and legal written notice.

On the other hand, a lease is an agreement that gives a tenant the right to occupy a certain building, house or apartment for a period often more than six months and above with the tenant paying the agreed rent while at the same time observing the set terms and conditions for the lease.

A lease goes further to mean any oral or written agreement, expressed or implied, creating a tenant-landlord relationship. As opposed to a rental agreement, a lease is not automatically renewed after it lapses but the tenant must renew it or if the landlord allows him or her to occupy the house or apartment without renewing the lease, the lease acquires the status of a periodical tenancy which is month by month.

Of equal importance is that under the lease agreement, the landlord cannot change the terms and conditions and can only do so with unequivocal acceptance of the tenant.

The fact that a lease can be oral is a surprise to many tenants and landlords who falsely believe that if they do not have a written contract between them either party can do as they wish. Tenants innocently believe that they can vacate an apartment or a house at will without giving any notice for the termination of his or her tenancy while the landlords on the other hand believe they can evict tenants at will.

While seeking advice, it doesn’t take me by surprise when a landlord asks how an occupant can prove that he or she is a tenant without proof of a written document. I always point out the obvious that the tenant has possession, usually has been there for several months, and is in possession of rent receipts and many times, witnesses or neighboring tenants can attest to the tenancy.

More often than not, I have come across several cases on oral leases for a year while litigating for clients at a Business Rent Tribunal sitting in Nairobi, the concept can be useful. A tenant signed a year’s lease with a landlord who stated that he would later sign the lease and send a copy to the tenant.

The landlord then gave the keys to the tenant who moved in. The landlord did not give a copy of the signed lease to the tenant. A month later, they got in an argument. The landlord argued that he did not sign the lease when the tenant was moving in and therefore the tenant was on a month-to-month basis. Further to this, the landlord issued the tenant with a month’s notice to move.

Legally speaking, the intent was to have a year’s lease, possession was given, and while the landlord could not be forced to sign the lease, the lease which the tenant signed, was proof of what was intended and that tenant could claim a year’s oral tenancy and so it was held.

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