Rent, in law and commerce, fixed payment made periodically for the use of land and the improvements (buildings) located on the land. The person who uses the land is called the tenant or lessee. He pays rent to the owner, called the landlord or lessor, or to a person or company authorized to act for the owner. Agreements to rent may be oral or written. Oral agreements are generally for less than one year. Those for longer periods are set out in written contracts called leases. Tenants who intend to use rented property for retail selling normally pay additional rental based on a percentage of annual sales.
In a less technical sense, the term rent is also applied to describe payments made to the owner for use of items other than land or buildings, such as automobiles, trucks, trailers, or tools. This form of rental is used not only by private individuals but also by many business firms because it releases for other uses funds that would otherwise be needed to purchase the equipment.
In economics, the term rent has a more specialized meaning than in law and commerce. It is the profit that the possessor of a resource (usually land, but sometimes an intangible, such as a special talent) receives from its use. Rent in this sense is an abstract concept important primarily in philosophical or theoretical descriptions of economic systems.