One of the questions we regularly get asked is “what is the difference between leasing and letting a property”? If this is something you have been wondering then read on to find out.
A lease and a letting agreement are both legal documents that have many similarities but there are differences and it’s important to understand this. There are many variations to lease and letting agreements and for the purposes of this blog we will solely discuss Calon’s lease compared to a general letting agreement that you find in most high street letting agencies.
- A lease is a contract between landlord and tenant for a longer period of time; Calon offer 12 month leases and as such comes greater security. After the initial 12 months the lease becomes a rolling lease bound by the same conditions until either party terminates.
- The property owner/landlord becomes the lessor and Calon becomes the tenant or lessee. Calon will then “sub-let” the property to homeless individuals or families temporarily until they find permanent accommodation.
- A lease cannot be changed once it’s been signed by both parties, if either party wants to change a clause they would have to wait until the lease expires and a new lease be drafted.
- The lessee and the lessor mutually agree the terms of the lease which are fixed for the term; these include rent, contract duration and repair and maintenance responsibilities etc.
- Calon’s lease offers a full responsive repairs lease – this means that for the duration of the contract Calon will undertake all day to day minor repairs. (The landlord remains responsible for fixtures and fittings, external and structural repairs.)
- Rent is guaranteed for the lease agreement duration (providing the property is habitable) even during periods when the property is empty. Plus Calon undertake all the void repairs such as decoration and carpet renewal.
- In direct contrast letting agreements are for a shorter term and as such offer more flexibility but for this reason are less secure.
- Landlords can vary the terms of the agreement such as increasing rent etc, this is beneficial when market conditions improve and a higher market rent can be achieved.
- Terminating agreements is usually quicker, meaning that possession of the property can be obtained faster if necessary, for example, if the landlord wants to move into the property at short notice.
- The repairs remain the responsibility of the landlord, usually an agency will manage the repair by taking the repair, arranging quotes, organising the contractor and communicating with the landlord and tenant, and the costs deducted from the rent.
- Generally void periods when the tenant vacates are not covered even when there is a rent guarantee in place (as the guarantee is for the life of the tenancy not an empty property period) – usual advice to landlords to budget for 10 months’ rent each year – this allows for empty periods and time to undertake maintenance.
Leasing or letting has pros and cons and it comes down to personal circumstance as to which route is best for you.
If you want to discuss your requirements or to find out more information visit www.calon.com or call us on 02920434429.