Lease, Rental Agreement, or Commercial Lease?

Three arrangements that are often lumped together, and choosing the wrong one is the most consequential decision on this page:

If you want flexibility, our rental agreement templates cover month-to-month tenancies — including deposits, required disclosures, and move-in condition reports, all of which apply equally to fixed-term leases. This page covers what’s different when the term is fixed.

What a Lease Must Contain

• Parties — the landlord (lessor) and every adult tenant (lessee), with full legal names and a service address for notices.
• Property — the full address and exactly what’s included: parking, storage, garden, furniture, appliances.
• Term — a specific start date and end date. “Twelve months” isn’t enough; “1 October 2026 to 30 September 2027” is.
• Rent — amount, due date, method, and late payment terms.
• Rent review, if the term is long enough to need one — when, how, and on what basis.
• Deposit — amount, where it’s held, and the conditions for return.
• Break clause, if there is one — see below.
• Repairs and maintenance — who is responsible for what.
• Use and occupancy — who may live there, pets, smoking, alterations.
• Assignment and subletting — whether the tenant may transfer the lease or let part of it, and whether landlord consent is needed.
• Landlord access — notice required for entry.
• What happens at the end of the term — expiry, renewal, or continuation on a periodic basis.
• Signatures and date, with witnessing or registration where your jurisdiction requires it for the length of term.

Fixed-Term Lease Structure

Free Lease Agreement Templates in MS Word

Each template below is editable in Word. State the exact start and end dates, decide on a break clause before you sign rather than after, and attach a condition report.

Residential Lease Agreement Template

A standard fixed-term residential lease covering term, rent, deposit, repairs, access, and end-of-term provisions.

Commercial Lease Agreement Template

For business premises — permitted use, rent review, repairing obligations, service charges, alterations, and dilapidations.

Get this Lease Agreement Template by clicking on this download button.

Source: eForms

Ending a Lease Early

This is the issue that defines a fixed-term lease, and it causes more disputes than anything else in it.

The default position in most jurisdictions is that a tenant who leaves before the end date remains liable for the rent until the term expires. Signing a twelve-month lease is committing to twelve months’ rent.

But there’s an important qualification many landlords and tenants don’t know about. In a large number of jurisdictions, a landlord whose tenant leaves early has a duty to mitigate — to make reasonable efforts to re-let the property rather than leaving it empty and billing the departed tenant for every remaining month. Once a new tenant moves in, the original tenant’s liability usually ends. The specifics vary, and in some places the duty doesn’t apply, but it’s worth knowing on either side of the arrangement.

There are three cleaner ways to handle early exit, and a well-drafted lease uses at least one:

• A break clause. A right for either party — or just the tenant — to end the lease early at a set point, with notice. The common residential form is a break after six months of a twelve-month term, on two months’ notice. It gives the tenant an exit and the landlord certainty for the first half. Negotiate it in before signing; adding one afterwards requires the landlord’s agreement.
• An early termination fee. A stated amount — often one or two months’ rent — that releases the tenant from the remaining term. Check your jurisdiction permits it, and that the amount is a reasonable estimate of the landlord’s loss rather than a penalty.
• Assignment or a replacement tenant. The tenant finds someone acceptable to take over the lease, with the landlord’s consent. Many leases allow this, and it’s usually the arrangement that costs everyone least.

Whichever route applies, put the agreement to end early in writing. A verbal “that’s fine, go” from a landlord is the start of a dispute about the deposit three months later.

When the Term Ends

Three things can happen at the end date, and the lease should say which:

• It expires. The tenant leaves, the property is inspected against the move-in condition report, and the deposit is returned less any agreed deductions.
• It’s renewed as a new fixed-term lease, often with a rent review. Agree renewal in writing well before the end date — two months ahead is sensible — so neither side is left guessing.
• It continues on a periodic basis. In many jurisdictions, if the tenant stays after the term and the landlord keeps accepting rent, the tenancy automatically becomes month to month on the same terms. That’s why so many tenancies end up as rental agreements whether or not anyone intended it — and why it’s worth deciding deliberately.

Either way, the end-of-tenancy inspection works exactly as described on our rental agreement page: compare against the signed condition report, distinguish damage from fair wear and tear, and itemize any deductions. Keep rent receipts for the whole term — they settle any argument about what was paid.

Commercial Leases

A commercial lease covers the same ground as a residential one and adds several clauses that don’t arise when someone is renting a home. They’re also where the money is — a five-year commercial lease is often one of the largest commitments a small business makes.

• Permitted use — what the premises may be used for. Drawn too narrowly, it can stop you changing what you sell; check it against your business plan, not just your current trade.
• Rent review — typically every few years, on a stated basis: open market rent, an index, or fixed increases. Upward-only review clauses are common in some markets and worth understanding before signing.
• Repairing obligations — who maintains what. Under a full repairing lease the tenant is responsible for the structure as well as the interior, which on an older building can be very expensive.
• Service charges — the tenant’s share of maintaining common areas in a multi-let building. Ask for the last few years’ figures.
• Alterations and fit-out — what you may change, whether consent is needed, and whether you must reinstate at the end.
• Dilapidations — the tenant’s liability for the property’s condition when the lease ends. This can produce a large bill at exactly the moment a business is moving out, so a schedule of condition at the start is essential.
• Break clauses — often with strict conditions attached, such as rent paid up to date and vacant possession given. Miss a condition and the break can fail.
• Security of tenure — in some jurisdictions business tenants have statutory rights to renew; in others, those rights can be excluded. Know which applies.

For a commercial lease of any significance, a template is a starting point for negotiation, not a document to sign as it stands. Take advice before committing.

Frequently Asked Questions

What is a lease agreement?

A contract granting a tenant the right to occupy property for a fixed term in exchange for rent, with the terms — including the rent — generally locked for the duration. It’s used for both homes and business premises.

What is the difference between a lease and a rental agreement?

A lease runs for a fixed term, typically six or twelve months for a home, and its terms are locked for that period. A rental agreement is periodic — usually month to month — renewing automatically until either side gives notice, with terms that can change on proper notice.

Can I end a lease early?

Only through a break clause, an early termination arrangement, a replacement tenant, or the landlord’s agreement. Otherwise the tenant usually remains liable for rent until the end date — though in many jurisdictions the landlord must make reasonable efforts to re-let the property, which limits that liability in practice.

What is a break clause?

A term allowing one or both parties to end the lease early at a specified point, with notice. A common residential example allows either side to end a twelve-month lease after six months on two months’ notice. Commercial break clauses often carry strict conditions that must be met exactly.

What happens when a lease ends?

The tenant either leaves, signs a renewal, or — in many jurisdictions — stays on and the tenancy automatically becomes periodic on the same terms. Decide deliberately and agree it in writing before the end date.

What is the difference between a residential and a commercial lease?

Residential leases are heavily regulated, with many terms fixed by law. Commercial leases are largely negotiated, usually run much longer, and add clauses on permitted use, rent reviews, repairing obligations, service charges, and dilapidations.

Does a lease need to be registered or witnessed?

It depends on the jurisdiction and the length of the term. Many places require leases above a certain length to be in writing, witnessed, or registered, and some require specific formalities for commercial leases. Check the requirements where the property is located.

Pete Smith

Pete Smith is a Business Management graduate and a passionate advocate for practical, accessible resources that empower professionals and entrepreneurs to succeed. With a strong foundation in organizational strategy and operational efficiency, Pete combines academic knowledge with real-world insights to simplify complex business processes. He is the creator behind a growing online platform dedicated to offering free, high-quality documents, templates, and actionable tips designed to save time and improve productivity.

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