Does apartment mean rent?

Many people are apartment dwellers, and just about everyone knows what one is, but does it always mean that you pay rent to live in them? Read on to discover exactly what apartment living means


Does apartment mean rent? The term “apartment” can be used to describe any residential unit inside a building (regardless of whether the building is a house, large residential building, townhouse, or condominium high-rise). Generally, what distinguishes apartments from the rest is that they are rented rather than owned. Residential units found in multi-residence buildings like condos and co-ops are often thought to be apartments, but unless they are subleased, they are not rentals. On the other hand, a single-family house that is being rented out to a tenant by the owner can be referred to as an apartment. When moving into an apartment, the tenant may either sign a rental agreement or lease agreement. These are very similar, with the main difference being the length of the contract.

Renting an apartment means entering into a legal arrangement with the owner of the property to live in the space for an agreed-upon fee. The definition of an apartment can be a bit difficult to pinpoint; this article details what you need to know about this type of housing unit in regards to renting. 

Apartment vs. flat vs. rental unit

The terms “apartment”, “flat”, and “rental unit” are often used interchangeably. The variance in their usage depends on the region – “apartment” is the preferred term in North America (although landlords and real estate brokers also often use the term “rental unit”), while “flat” is commonly used in British English, Indian English, and South African English. In Australia, the preferred term is “unit”.

For many people, an apartment is a residential unit that is inside a building. This implies that an apartment is a single living space among others in a bigger structure. So then, what about a duplex or a single-family house that the owner rents out to a tenant? Even though the rental unit is what you would define as a house, it can also be referred to as an apartment.

Are co-ops and condos apartments?

A common opinion is that condos and co-ops are apartments simply because they are residential units that are found in a multi-residence building, plus they physically resemble rental apartments. The main difference between apartments and condos/co-ops stems from ownership – an apartment is housed within a building that is owned by a single entity, while a condo/co-op is owned by an individual and is typically managed by the owner or the community’s homeowner association (HOA) 

These housing types are not rentals unless the unit is being subleased by the owner. If a condo or co-op owner rents out their unit, then it becomes a rental apartment. When you rent a condo, the individual owner becomes your landlord, but when you rent a standard apartment, the owner of the building serves as your landlord. 

So what sets apartments apart?

There are two main definitions for apartments:

  • A living space in a residential building – When people use the term “apartment” in this context, it is simply a housing unit without regard to who owns it. The living space may be made up of a set of rooms or a single room, and it may be one of several or multiple such units in the building. Whether the living space is owned or rented by the inhabitants, it still fits this description of an apartment.
  • Any rented living space – This definition does not include living spaces inhabited by residents who are the owners. Therefore, under this definition, co-ops and condos are not apartments. If the inhabitants of a maisonette pay rent to live there, then the house is their apartment.

Is there a difference between a lease and rental agreement?

When it comes to apartment renting, the terms “rental agreement” and “lease agreement” are often used interchangeably. However,these terms can refer to two different types of agreements. While both leases and rental agreements are legally binding contracts, each serves a distinct purpose. 

What is a lease agreement?

Before you move into a rental property, the landlord may require you to sign a lease agreement. A lease can be defined as a contract between a landlord and tenant that gives the tenant the right to reside in a property for a fixed period. The term for a lease typically lasts for 6-12 months. A contract legally binds both parties to the lease.

Residential leases should spell out the expectations between the tenant and landlord, including rent, duration of the agreement, and the responsibilities of both parties. A clear, concise, and well-thought-out lease contract can help to protect both parties’ interests, as neither can legally alter the agreement without seeking written consent from the other.

  • Pros – If you want stability, a lease may be the best option for you. Leases are the preferred form of contract for many landlords as they offer stable, long-term occupancy, which in turn translates to a more steady income stream and cut down on turnover costs.
  • Cons – Once a lease is signed, the rental cost remains the same until the end of the agreement. This may negatively impact profitability if the property value increases within that year.

What is a rental agreement?

Rental agreements, unlike long-term lease agreements, provide tenancy for a shorter period – typically 30 days. Rental agreements are generally considered “month-to-month”, which means that they automatically renew at the end of each month unless otherwise directed by the landlord. With a rental agreement, both the landlord and tenant are at liberty to make alterations to the terms of the agreement at the end of each term period, as long as the applicable notice procedures are followed.

  • Pros – Because a rental agreement is short-term, it allows for more flexibility when it comes to rent revisions, which is beneficial to landlords. Rental agreements are also ideal for tenants who can’t commit to a long-term lease period.
  • Cons – A month-to-month lease leaves a tenant who wants a long-term arrangement vulnerable to frequent rent raises. For landlords, this short-term agreement could mean increased expenditure due to a higher tenant turnover.

What are the typical provisions in rental agreements and leases?

Both lease and rental agreements may have variations in terms of structure and flexibility. That said, both of these contracts typically contain a standard number of provisions, some of which include:

  • 1. Names and addresses of the tenant and landlord – The tenant (lessee) and the landlord (lessor) are the people who will sign the rental agreement or lease (along with a co-signer, if included), so both parties names and addresses will be included in the contract. 
  • 2. Rental property address and details – The property address may be referred to as “the premises” in the contract. Both types of agreements may also include relevant details on any storage areas, furnishings, parking space, or any other extras that come with the rental property.
  • 3. Rent – Both types of contracts typically specify the amount of rent due each month, where and when it’s due, the preferred forms of payment, and late fees.
  • 4. Term of the tenancy – The term of the tenancy is the period a tenant will occupy the unit. The contract should clearly state the beginning date and whether it’s a lease or a month-to-month tenancy. If it’s a lease, the ending date should be included as well. In most cases, leases have a one-year term. 
  • 5. Deposits and fees – The contract should indicate the amount a tenant is expected to pay as a security deposit and other fees such as last month’s rent and cleaning deposit.
  • 6. Condition of the rental unit – Most contracts include a clause in which the tenant agrees that the property is in livable condition and promises to bring any dangerous condition that may arise to the landlord’s attention.
  • 7. Utilities – The landlord should clearly state who pays for what utilities. In most apartments, a landlord will pay for garbage and sometimes for the water as well, especially if there is a yard. Tenants are expected to pay for other services such as electricity, gas, and the internet. 
  • 8. Limits on tenant behavior – Most contracts include a clause that forbids tenants from using the property or adjacent areas in a manner that violates any law or ordinance. These clauses also forbid tenants from intentionally damaging the property or interfering with the right to quiet enjoyment of other tenants or nearby residents.
  • 9. Repair and maintenance responsibilities – A well-thought-out contract will include a clause that spells out the tenant’s responsibility when it comes to keeping the property in good condition. Many leases and rental agreements also obligate tenants to reimburse the landlord for the amount spent on repairing damage resulting from neglect or property abuse on their part. Most contracts also tell tenants what they’re not allowed to do in terms of repairs, such as painting walls or installing new floors without the landlord’s permission.
  • 10. Restrictions on the number of occupants – Landlords may also set a limit to the number of individuals who can live in a rental unit. That said, landlords are not at liberty to set unreasonably low figures – federal law requires them to allow two persons per bedroom unless there is a justifiable reason for the restriction.

Final thoughts

To conclude, any housing unit that you pay rent to live in will almost always be referred to as an apartment, or a similar regionally appropriate term. As a tenant, your landlord may either offer a lease agreement or rental agreement – the suitable one depends on your needs.

Melanie Asiba

Melanie is an author, and she enjoys traveling, reading, and trying out new things. In addition to writing for Apartment ABC.

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