28/10/2024
KNOW THE DIFFERENCES BEFORE YOU SIGN THE DOTTED LINE .
Understanding the Distinction: Deed of Lease vs. Deed of Agreement
Recognize that these two documents serve unique purposes. To determine which document suits your needs, consider the following:
Deed of lease is for temporary possession (Rental) while deed of agreement is for a property sale and purchase.
Deed of Lease
A Deed of Lease is a contractual agreement between a lessor (landlord) and lessee (tenant) granting the lessee temporary possession and use of a property for a specified period (lease term).
Key features:
1. Lease duration: Typically ranges from 1-99 years.
2. Rent and payment terms: Specifies rent, payment schedule and conditions.
3. Property use: Defines permitted uses of the property.
4. Termination clauses: Outlines conditions for termination.
5. *Renewal and expiration: Addresses renewal options and lease expiration.
Deed of Agreement
A Deed of Agreement, also known as a Deed of Contract or Agreement for Sale, outlines terms for the sale and purchase of a property. Key features:
1. Sale and purchase: Documents the agreement to sell and purchase.
2. Price and payment: Specifies purchase price, payment terms and conditions.
3. Property description: Accurately describes the property.
4. Completion date: Sets the date for transaction completion.
5. Conditions precedent: Lists conditions that must be met before completion.
Key Differences
1. Purpose: Deed of Lease grants temporary possession, while Deed of Agreement facilitates property sale.
2. Duration: Lease agreements have a fixed term, whereas Deeds of Agreement aim for permanent transfer.
3. Ownership: Lease agreements do not transfer ownership, whereas Deeds of Agreement result in ownership change.
4. Obligations: Lease agreements emphasize rental obligations, whereas Deeds of Agreement focus on sale and purchase terms.
In summary, a Deed of Lease governs rental agreements, while a Deed of Agreement facilitates property sales.
