Rent vs lease
Rent Vs Lease

Rent Vs Lease: The Difference Simply Explained

Is rent vs lease a property is the same? In part, yes. But not quite. There is one key difference. It also explains why people like to lease, especially in agriculture and gastronomy.

A lease is similar to a tenancy in many ways. Both are usually a contractually defined continuing obligation. The provisions of the lease agreement are based on those of the rental agreement for essential things, but there are also differences. So the leaseholder has one more essential right than the tenant renter: the so-called “fruiting”.

The Differences Between Rent Vs Lease

A tenant has one more important right

The leaseholder not only has the right to grant use of a property, which the tenant also has. In addition, it has the right to “enjoy the fruits”, the fruits representing gain in a broader sense. Means: In contrast to the tenant, the leaseholder may keep and use economic income and uses of the leased property.

A vivid example: You rent a weekend house with an orchard. You may use the house and property and stay there. However, you may not harvest apples, plums or walnuts, let alone sell them and make a profit from them. That would be theft and therefore punishable. As tenants of this property, they are allowed to harvest the fruit and turn it into money.

Article 581 of the Civil Code states: “(1) The lease agreement obliges the lessor to grant the lessee the use of the leased object and the enjoyment of the fruits during the lease period, insofar as they are to be regarded as income according to the rules of orderly management grant.”

Leases are popular with farmers and restaurateurs

The purpose of concluding a lease agreement is therefore often profit maximization. Typically, agricultural areas such as fields or orchards are leased, but also restaurants and their inventory. A farmer who leases land from the landowner and grows crops may harvest it, sell it, and keep the proceeds. A restaurateur can use the counter, kitchen or beer tap to make economic profit.

The tenant pays the lessor a monthly rent. The amount sometimes depends on the turnover that can be achieved when using it. For restaurateurs, for example, this also has advantages: In weak months, they have to pay less rent than when things are going well.

Differences also in the termination

A lease agreement gives the lessor more leeway than the landlord: In the lease agreement, for example, the lessee can be given regulations regarding opening times, days off and holidays. There are also differences to the rental agreement when it comes to the notice period: The ordinary notice period for an open-ended lease agreement is only possible at the end of the lease year and must take place no later than the third working day of the six months. A fixed-term lease cannot be terminated.

Last Updated on April 2, 2022 by Home Kitchen Magazine Team

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