Monday, June 9, 2014

Renting and Leasing

The most confusing concepts are those that are quite similar but not identical.  In some cases, the subtle difference blurs, rendering the terms interchangeable.  On other cases, purists, often jurists, insist on the difference even if the general public does not quite grasp it.  An example of this phenomenon is the word pair rent and lease.  Clearly derived from different roots, they both mean in a general sense to allow temporary use of asset, mobile or stationary, in compensation for a regular monthly fee.

In English, the difference remains distinct. A lease, whether of a car or an office, is a fixed duration agreement during which the tenant pays a  predetermined and unchangeable amount during the lease period.  In some case, such as automobile leases, these payments may create some type of potential ownership rights, but this provision does not define a lease.  By contrast, a rental agreement is a renewable short term agreement, daily to monthly depending on the context, whose payment rate may change at each interval.  For example, people may rent a car for a week or day or an apartment on a monthly basis.  Neither side is bound to renew the agreement nor is any ownership rights allowed.  To rent is simply to get short-term temporary use of an asset with minimum legal obligations.  In terms of grammar, each word has a noun and verb form, i.e. lease and rental/rent, respectively.

In French, the distinction has become muddled (see .  The word bail [buy] means lease while location [locasion] refers to a rent, but are in fact used interchangeably.  The verb form for bail, bailler, according to the above source, has given way to donner à bail or louer, the latter based on the abovementioned location. To distinguish the long term use of a car, French dealerships use the English term le leasing because louer is ambiguous (and sounds less special, maybe).

Hebrew does have two separate words, שכירות [Schzerut] and חכירה [Hachira], loosely translated as renting and leasing. In practice, under Israeli law, the former is for a period less than five years while the latter is for five years or more. See for more information.  In terms of the verb, as in French, one verb,  להשכיר [lahaskir] is primary used for both uses, although להחכיר [lahhakhir] does exist.

So, sometimes the difference between a lease and rent agreement is no difference.

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