Lease vs Rent: What’s the Difference?

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If you’re searching for a place to live, you’ve probably come across both terms: “lease” and “rent.” Sometimes they seem to be used interchangeably. Other times, they appear to mean completely different things. So what’s the actual difference between leasing and renting? And more importantly, which one is right for your situation?

Here’s the short answer: “Renting” is the general term for paying to live in someone else’s property. “Leasing” is a specific type of renting where you sign a fixed-term contract (usually 6-12 months) with set terms and conditions. All leasing is renting, but not all renting requires a lease. You can rent month-to-month without a formal lease, or you can rent under a lease agreement. The key difference is commitment: leases lock you in for a specific period with stable rent, while month-to-month renting offers flexibility but less security.

The confusion is understandable. In everyday conversation, people often say “I’m renting an apartment” even when they’ve signed a lease. Real estate professionals, landlords, and rental platforms may use these terms differently. The truth is that while lease and rent are related concepts, they have distinct legal meanings that affect your rights, responsibilities, and flexibility as a tenant.

This guide will break down exactly what each term means, explain the key differences, and help you understand which type of rental agreement makes the most sense for your lifestyle, timeline, and plans. Whether you’re a first-time renter, relocating for work, or simply confused by rental jargon, you’ll leave with a clear understanding of leases versus renting.

What Does “Rent” Mean?

At its most basic level, rent is the money you pay to occupy someone else’s property. It’s a payment for temporary use of a space, whether that’s an apartment, a room, a house, or even commercial property. When you pay rent, you’re essentially paying for the privilege of living somewhere without owning it.

The term “renting” describes the overall relationship between a tenant (the person paying) and a landlord (the person receiving payment). This relationship exists regardless of the specific type of agreement you have. You can rent on a month-to-month basis, under a fixed-term lease, or through various other arrangements.

Think of “rent” as the umbrella concept. Anytime you’re paying to live in a property you don’t own, you’re renting. The payment itself, the monthly amount due, is also called “rent.” So when someone asks “How much is your rent?” they’re asking about the payment amount. When they ask “Are you renting or buying?” they’re asking about your housing situation overall.

Key Characteristics of Renting

Temporary occupancy – You have the right to live in the property for as long as your agreement allows, but you don’t build equity or ownership.

Monthly payments – Rent is typically paid monthly, though some arrangements allow weekly or even daily payments.

No ownership rights – Unlike a mortgage, rent payments don’t give you any ownership stake in the property. When you leave, you take nothing with you except your belongings and (hopefully) your security deposit.

Flexibility in commitment length – Renting can be very short-term (like a vacation rental) or long-term (years under a lease), depending on the specific agreement.

The landlord retains control – The property owner maintains ownership and has certain rights even while you’re living there, such as the right to inspect the property with proper notice.

What Does “Lease” Mean?

A lease is a specific type of rental agreement, a legally binding contract that outlines the terms and conditions under which you’re renting a property. It’s a formal document that specifies exactly what both you (the tenant) and the landlord agree to for a defined period.

Leases are contracts. They include details like how much rent you’ll pay, when it’s due, how long the agreement lasts, what utilities you’re responsible for, rules about pets, guests, and property maintenance, and what happens if either party breaks the agreement. Both the tenant and landlord sign the lease, making it an enforceable legal document.

The most important characteristic of a lease is that it’s time-bound. Leases have a specific start date and end date. The most common lease length in the United States is 12 months (one year), though you’ll also find six-month leases, 18-month leases, and other variations. During this fixed period, both parties are bound by the terms. You can’t simply decide to leave next month without consequences, and the landlord generally can’t raise your rent or evict you without cause during the lease term.

Key Characteristics of a Lease

Fixed time period – Leases have clear start and end dates, creating a defined commitment from both sides.

Written contract – While not all rental arrangements require a written contract, leases almost always do. This protects both parties by clearly documenting what was agreed upon.

Rent amount locked in – Your monthly rent is fixed for the entire lease term. It cannot increase until the lease ends and you either sign a new lease or transition to a different arrangement.

Terms and conditions specified – Everything from maintenance responsibilities to noise restrictions is detailed in writing.

Legal obligations – Both parties have enforceable rights and responsibilities. If you break the lease early, you may owe penalties. If the landlord violates the lease terms, you have legal recourse.

Renewal or termination – When a lease ends, it doesn’t automatically continue. You must either sign a new lease, transition to month-to-month renting, or move out.

Lease vs Rent: The Core Differences

Now that we understand what each term means individually, let’s clarify how they differ in practice. The confusion exists because “renting” is the general activity, while “leasing” is a specific way to rent with defined terms.

Commitment Length

Leasing: When you sign a lease, you’re committing to a specific time period, typically 6-12 months or longer. You cannot legally leave before the lease ends without consequences (such as paying the remaining rent or losing your security deposit). This commitment cuts both ways: the landlord also cannot evict you without cause or change the terms during this period.

Renting (Month-to-Month): When people contrast “renting” with “leasing,” they’re usually referring to month-to-month rental agreements. In this arrangement, you rent the property on an ongoing basis with no fixed end date. Either party can typically end the arrangement with 30 days’ notice, though this varies by state. This offers maximum flexibility but less stability.

Price Stability

Leasing: Your rent amount is locked in for the entire lease term. If you sign a one-year lease at $1,500 per month, you’ll pay exactly that for all 12 months, even if market rates increase. This predictability makes budgeting easier and protects you from sudden rent increases.

Renting (Month-to-Month): Without a lease, landlords can typically raise your rent with proper notice (usually 30-60 days, depending on local laws). If the rental market heats up in your area, you could face rent increases multiple times per year. However, this also means you’re not locked into a price if market rates drop.

Flexibility

Leasing: Less flexible. If you need to relocate for work, have a life change, or simply don’t like the neighborhood, you’re generally stuck until the lease ends. Breaking a lease early can be expensive and complicated. Some landlords will work with you to find a replacement tenant, but they’re not required to.

Renting (Month-to-Month): Highly flexible. You can typically give 30 days’ notice and move on without penalty. This is ideal for people with uncertain timelines, temporary job assignments, or those testing out a new city before committing long-term. However, the landlord has the same flexibility to end your tenancy with notice.

Legal Protection

Leasing: Strong legal protection for both parties. The written lease serves as proof of what was agreed upon. If disputes arise, you have documentation. Landlords cannot arbitrarily change rules, raise rent, or evict you during the lease term (except for serious violations).

Renting (Month-to-Month): Less formal, though you still have basic tenant rights under state and local laws. Without a comprehensive written agreement, disputes about what was agreed upon can be harder to resolve. Your housing situation is inherently less stable since either party can end the arrangement relatively quickly.

Application Process

Leasing: Usually requires a thorough application process including credit checks, income verification (often requiring you to earn 2.5-3x the monthly rent), references, and background checks. The screening is more rigorous because the landlord is committing to you for a longer period.

Renting (Month-to-Month): May have a simpler application process, though this varies. Some month-to-month arrangements, especially with professional landlords, still require full screening. However, in informal situations, the barrier to entry might be lower since there’s less long-term commitment.

Types of Rental Agreements Explained

Understanding the spectrum of rental arrangements helps clarify the lease versus rent question. Here are the most common types you’ll encounter:

Fixed-Term Lease (Standard Lease)

This is what most people think of when they hear “lease.” You sign a contract committing to rent the property for a specific period, most commonly 12 months. The rent amount, due date, and major terms are locked in for this entire period. At the end of the term, the lease expires, and you must either:

Best for: People with stable jobs, students attending school for an academic year, families settling in an area, or anyone who values price predictability and stability.

Common lengths: 6 months, 12 months, 18 months, or 24 months.

Month-to-Month Rental Agreement

This is an ongoing rental arrangement with no fixed end date. You pay rent each month and continue living there until either you or the landlord decides to end the tenancy. Either party typically must give 30 days’ written notice (though this varies by state and local laws).

Many month-to-month arrangements begin as fixed-term leases that convert to month-to-month status after the initial lease expires. This happens when both parties want to continue the arrangement but aren’t ready to commit to another full lease term.

Best for: People with uncertain timelines, those between permanent housing situations, remote workers who might relocate, or anyone prioritizing flexibility over price stability.

Note: Month-to-month rent is often 10-20% higher than lease rates because landlords value the commitment that comes with a lease.

Short-Term Lease or Mid-Term Rental

These are fixed-term leases for shorter periods, typically 1-6 months. They’re designed for temporary situations like internships, seasonal work, contract assignments, or temporary relocations. Short-term leases provide some stability and written agreements without the year-long commitment.

Furnished apartments and corporate housing often use this model. Platforms like June Homes specialize in flexible mid-term rentals that give you the security of a lease with shorter commitment periods.

Best for: Interns, travel nurses, people relocating for temporary work assignments, those waiting for permanent housing to become available, or anyone testing out a new city.

Common lengths: 1-6 months, with some flexibility to extend.

Week-to-Week or Daily Rentals

These ultra-short-term arrangements are common in vacation rentals, extended-stay hotels, or emergency housing situations. You’re essentially renting by the day or week with no long-term commitment. These arrangements are the most flexible but also the most expensive per night.

Best for: Temporary stays, vacation housing, emergency situations, or transitions between permanent housing.

Platforms: Airbnb, VRBO, extended-stay hotels. For longer short-term stays, check out these hotel alternatives.

Lease with Option to Renew

Some leases include automatic renewal clauses or options to renew at the end of the term. This might mean the lease automatically converts to month-to-month, or that you have first right to sign a new lease at specified terms. These clauses vary widely, so read your lease carefully to understand what happens when your term ends.

Best for: People who want the stability of a lease but may need flexibility at the end of the term.

Advantages of Leasing

Signing a lease comes with several benefits that make it the preferred choice for most long-term renters:

Price stability and predictability – You know exactly what you’ll pay for the entire lease term, making budgeting straightforward. You’re protected from rent increases even if the market changes dramatically. Use our rent calculator to determine what you can afford.

Housing security – You cannot be evicted without cause during your lease term. This stability is valuable for families with children in school, people with established routines, or anyone who values consistency.

Leverage in negotiations – Landlords value committed tenants. When signing a lease, you may have more negotiating power for things like minor renovations, pet permissions, or rent reductions, especially in competitive markets.

Legal protection – A detailed written lease protects your rights and clearly outlines responsibilities. If disputes arise, you have documentation to support your position.

Better rental rates – Monthly rent is typically lower under a lease compared to month-to-month arrangements because you’re providing the landlord with guaranteed occupancy and income.

Access to desirable properties – The best apartments, especially in competitive markets, often require leases. Landlords of high-quality properties rarely offer month-to-month arrangements to new tenants.

Relationship with landlord – A lease demonstrates commitment, which can lead to a better landlord-tenant relationship. Responsive maintenance, accommodation of reasonable requests, and consideration for lease renewals often come easier when you’re a stable, long-term tenant.

Advantages of Month-to-Month Renting

While leases offer stability, month-to-month renting provides flexibility that’s invaluable in certain situations:

Maximum flexibility – You can relocate on short notice for job opportunities, family needs, or personal preferences. This freedom is especially valuable in today’s dynamic work environment where remote positions and relocations are common. Learn more about flexible leases as a career advantage.

No long-term commitment – Ideal when you’re uncertain about your timeline, testing out a neighborhood, or waiting for other housing to become available. You’re not locked into a year-long commitment that might not fit your evolving plans.

Easy exit strategy – If problems arise with the property, neighbors, or landlord, you can leave relatively quickly. With a lease, you’d be stuck dealing with issues for months or potentially paying thousands to break your contract.

Ability to respond to life changes – New job offers, relationship changes, health issues, or family emergencies often require quick relocations. Month-to-month renting accommodates life’s unpredictability.

Testing before committing – Many smart renters start with month-to-month or short-term arrangements when moving to a new city. Once you’re confident in your choice, you can sign a longer lease for better rates.

Seasonal flexibility – If you work seasonally, travel frequently, or have a variable lifestyle, month-to-month renting allows you to maintain a home base without year-long commitment.

Simpler application process – Sometimes (though not always) month-to-month arrangements have less rigorous screening, which can help if you have unique income sources, are self-employed, or have imperfect credit.

Disadvantages to Consider

Both arrangements have downsides worth understanding before you commit:

Disadvantages of Leasing

Limited flexibility – Breaking a lease early can cost thousands of dollars. You might be required to pay rent for the remaining months, lose your security deposit, or face legal action. Even if your landlord agrees to let you out early, finding a replacement tenant takes time and effort.

Locked into problems – If you discover issues with the property, difficult neighbors, neighborhood changes, or realize the commute is unbearable, you’re stuck until the lease ends.

Risk of market changes – If rental prices drop in your area after you sign, you’re still obligated to pay your agreed-upon rate. You can’t take advantage of better deals that emerge during your lease term.

Renewal uncertainty – Your landlord isn’t obligated to renew your lease. Even if you’ve been a perfect tenant, they might decide to sell the property, move in a family member, or raise the rent substantially at renewal time.

Pressure to decide quickly – Leases typically end on specific dates, creating pressure to decide your next steps (renew, move, negotiate) within a tight timeframe, often 60-90 days before your lease expires.

Disadvantages of Month-to-Month Renting

Higher monthly cost – Month-to-month rent is typically 10-20% higher than lease rates because landlords charge a premium for the lack of commitment and increased turnover risk. Consider using a rent increase calculator to understand potential costs.

Limited housing security – Your landlord can end your tenancy with relatively short notice (usually 30-60 days). While this rarely happens without reason, you have less protection than with a lease.

Frequent rent increases – Without a lease locking in your rate, landlords can raise rent regularly (within legal limits and notice requirements). In hot rental markets, this can become expensive quickly. Learn about preparing financially for rent increases.

Less negotiating power – Landlords may be less willing to make improvements, allow pets, or accommodate special requests when they know you could leave any month.

Availability challenges – Many quality properties, especially professionally managed apartments, require leases. Your housing options may be more limited if you need month-to-month arrangements.

Potential instability – Constantly knowing either party could end the arrangement can create stress and make it harder to feel settled in your home.

Which Option Is Right for You?

Choosing between a lease and month-to-month renting depends on your personal circumstances, plans, and priorities. Here’s a decision framework to help:

Choose a Lease If You:

  • Have stable employment and income in the area
  • Plan to stay in the city or neighborhood for at least a year
  • Want predictable monthly expenses for budgeting
  • Value housing security and stability
  • Have a family or dependents who benefit from consistency
  • Are attending school for an academic year or longer
  • Want access to the best properties in competitive markets
  • Prefer lower monthly rent costs
  • Are relocating permanently or semi-permanently for work
  • Understand what you need to rent an apartment

Choose Month-to-Month If You:

  • Have a temporary job or contract position
  • Are uncertain about your long-term plans
  • Might need to relocate on short notice
  • Are testing out a new city before fully committing
  • Work remotely and want geographic flexibility
  • Are between permanent housing situations
  • Have had bad experiences being locked into leases
  • Value freedom and flexibility over cost savings
  • Are in a transitional life phase (recent grad, career change, post-breakup)
  • Can afford the premium cost for flexibility

Consider Short-Term or Mid-Term Leases If You:

  • Have a defined temporary situation (internship, seasonal work, contract assignment)
  • Want the protection of a written agreement without year-long commitment
  • Are relocating for 3-6 months and want furnished, all-inclusive housing
  • Are a travel nurse, consultant, or similar professional with frequent relocations
  • Need time to find permanent housing in a new city
  • Want the stability of a lease with a shorter commitment period
  • Need to understand the benefits of renting first

Platforms like June Homes offer flexible lease terms ranging from 1-12 months, giving you the best of both worlds: written lease protection without the rigid year-long commitment. These arrangements are increasingly popular for people with mobile lifestyles or uncertain timelines.

Understanding Your Lease Agreement

If you decide a lease is right for you, it’s critical to understand what you’re signing. Leases are legal contracts, and you’re bound by the terms once you sign. Here are the key sections to review carefully. Before signing, check out these things to remember before renting an apartment.

Basic Information

  • Parties involved: Your name(s), the landlord’s name, and property management company if applicable
  • Property address: The exact address of the unit you’re renting
  • Lease term: Start date and end date (e.g., January 1, 2025 – December 31, 2025)
  • Rent amount: Monthly rent and when it’s due (typically the first of the month)

Financial Terms

  • Security deposit: Amount required (typically one month’s rent) and conditions for refund. Learn more about security deposits.
  • Additional deposits: Pet deposits, key deposits, or other fees
  • Late fees: Penalties for paying rent after the due date
  • Utilities included: What’s covered in your rent versus what you pay separately
  • Payment methods: How and where to submit rent payments

Rules and Restrictions

  • Pet policy: Whether pets are allowed, size/breed restrictions, and additional fees
  • Subletting: Whether you can sublet or have roommates join mid-lease
  • Guests: Rules about overnight visitors or long-term guests
  • Noise restrictions: Quiet hours and neighbor consideration requirements
  • Alterations: What changes you can make to the property (painting, hanging pictures, etc.)

Responsibilities

  • Maintenance obligations: What you’re responsible for versus what the landlord handles
  • Repairs: How to request repairs and expected response times
  • Property condition: Requirements for keeping the property clean and damage-free
  • Lawn care or snow removal: Responsibilities for outdoor maintenance if applicable

Termination Clauses

  • Early termination: Penalties and procedures for breaking the lease early
  • Renewal terms: Whether the lease automatically renews or requires a new agreement
  • Notice requirements: How much advance notice you must give when moving out
  • Landlord entry: When and how the landlord can enter the property (usually requires 24-48 hours notice except in emergencies)

Legal Protections

  • Habitability standards: The landlord’s obligation to provide a safe, livable property
  • Eviction procedures: Legal process required to evict you
  • Dispute resolution: How disagreements between you and the landlord will be handled

Always read your entire lease before signing. If anything is unclear, ask questions. If terms are unreasonable or concerning, negotiate or walk away. Never sign a lease under pressure or without understanding what you’re agreeing to.

Month-to-Month Agreements: What to Know

Month-to-month rental agreements can be written or verbal, though written is always better for clarity and protection. Even without a formal lease, you should get basic terms in writing. Here’s what a month-to-month agreement should include:

Essential Elements

Rent amount and due date – What you’ll pay monthly and when it’s due

Security deposit terms – Amount and conditions for return

Notice requirements – How much advance notice either party must give to end the tenancy (typically 30 days)

Basic rules – Pet policies, guest policies, maintenance responsibilities, and any other important terms

Rent increase procedures – How much notice the landlord must give before raising rent (varies by state, typically 30-60 days)

State and Local Laws

Month-to-month tenancies are heavily regulated by state and local laws. These laws govern:

  • Minimum notice periods for termination (30 days is common, but some places require 60)
  • Rent increase limits (some cities have rent control or require specific notice periods)
  • Just cause eviction requirements (in some jurisdictions, landlords must have specific reasons to end month-to-month tenancies)
  • Tenant rights regarding repairs, habitability, and privacy

Research your local laws or consult with a tenants’ rights organization to understand your protections, even without a formal lease.

Converting Between Lease and Month-to-Month

Many rental situations evolve over time. Understanding how conversions work helps you plan ahead:

From Lease to Month-to-Month

This is the most common transition. When your fixed-term lease expires, it often automatically converts to a month-to-month arrangement if:

  • Neither party gives notice to terminate
  • You continue paying rent and the landlord continues accepting it
  • No new lease is signed

This automatic conversion is called a “holdover tenancy” or “tenancy at will” in legal terms. All the terms of your original lease typically remain in effect (rent amount, rules, etc.) except the lease becomes month-to-month.

Benefits: You gain flexibility without needing to move or sign a new lease.

Risks: Your rent could increase with proper notice, or the landlord could ask you to leave with notice.

Pro tip: Some landlords raise rent significantly when you convert to month-to-month. If you know you’ll want month-to-month status after your lease ends, negotiate this in advance or ask about the expected rate.

From Month-to-Month to Lease

If you’ve been renting month-to-month and decide you want more stability and potentially lower rent, you can ask your landlord about signing a lease. Many landlords are happy to do this because it guarantees them a committed tenant and steady income.

Benefits: You’ll likely get a rent reduction (10-20% lower than month-to-month rates) and housing security for the lease term.

Negotiation opportunity: Use your track record as a reliable tenant to negotiate favorable lease terms, such as allowing pets, minor renovations, or a below-market rent rate.

Common Lease vs Rent Questions Answered

Can I negotiate my lease terms?

Yes, almost everything in a lease is negotiable, especially in rental markets that favor tenants. Common negotiation points include rent amount, lease length, pet policies, parking, minor renovations, and early termination clauses. Professional property management companies have less flexibility than individual landlords, but it never hurts to ask. Learn how to negotiate rent effectively.

What happens if I break my lease?

Breaking a lease early typically results in financial penalties. You might be required to pay rent for the remaining months, forfeit your security deposit, or pay a specific break-fee outlined in your lease. Some landlords will work with you to find a replacement tenant, which can minimize penalties. The exact consequences depend on your lease terms, state laws, and your landlord’s willingness to negotiate.

Can a landlord raise my rent during a lease?

Generally, no. Your rent is locked in for the lease term unless your lease specifically includes a clause allowing increases (which is uncommon). However, once your lease expires, the landlord can raise rent to whatever the market will bear (subject to local rent control laws).

Do I need renters insurance with a month-to-month arrangement?

Whether you have a lease or month-to-month arrangement, renters insurance is highly recommended. It protects your belongings, provides liability coverage, and is incredibly affordable (typically $15-30 per month). Some landlords require it regardless of your rental arrangement type.

Can I sublet with a month-to-month rental?

This depends entirely on your agreement with your landlord and local laws. Many month-to-month arrangements prohibit subletting without written permission. Always ask before subletting, as doing so without permission can result in eviction. Understand the difference between subletting and subleasing.

Is a verbal lease legally binding?

In many states, verbal leases for terms under one year are legally enforceable. However, proving the terms of a verbal agreement is extremely difficult. Always get rental agreements in writing, even for month-to-month arrangements.

What if I need to move before my lease ends?

Communicate with your landlord immediately. Options include finding a replacement tenant, negotiating an early termination agreement, or subletting (if allowed). Some landlords will let you out of your lease with proper notice and an early termination fee. The cost of breaking a lease is almost always negotiable.

Making Your Decision

Understanding the difference between leasing and renting comes down to recognizing that “renting” is the umbrella term for any arrangement where you pay to live in someone else’s property, while a “lease” is a specific type of rental agreement with a fixed term and detailed contract.

Neither option is inherently better. The right choice depends on your circumstances:

  • Leases offer stability, legal protection, and lower monthly costs – ideal for people with clear plans and a desire for predictable housing
  • Month-to-month renting offers flexibility and freedom – perfect for people with uncertain timelines, temporary situations, or who value mobility over cost savings
  • Short-term and mid-term leases provide middle ground – combining written agreements with shorter commitment periods for transitional situations

Consider your job stability, financial situation, family needs, and lifestyle priorities. If you’re still uncertain, remember that housing situations can evolve. Many people start with a short-term arrangement to test a new city or neighborhood, then transition to a longer lease once they’re confident in their choice.

For those seeking the security of a lease with more flexibility than traditional year-long commitments, modern platforms like June Homes offer furnished rentals with flexible lease terms from 1-12 months. These arrangements give you written contracts, verified properties, and all-inclusive pricing without locking you into rigid timelines.

Whatever you choose, make sure you understand your agreement fully before signing. Read every clause, ask questions about anything unclear, and know your rights under local tenant laws. The difference between a great rental experience and a terrible one often comes down to understanding exactly what you’re agreeing to from day one.

Ready to find your next home? Whether you need a traditional lease, month-to-month flexibility, or something in between, understanding these concepts ensures you’ll make the choice that’s right for your situation. Check out our complete guide to renting an apartment for more tips on getting started. flexibility and freedom** – perfect for people with uncertain timelines, temporary situations, or who value mobility over cost savings

  • Short-term and mid-term leases provide middle ground – combining written agreements with shorter commitment periods for transitional situations

Consider your job stability, financial situation, family needs, and lifestyle priorities. If you’re still uncertain, remember that housing situations can evolve. Many people start with a short-term arrangement to test a new city or neighborhood, then transition to a longer lease once they’re confident in their choice.

For those seeking the security of a lease with more flexibility than traditional year-long commitments, modern platforms like June Homes offer furnished rentals with flexible lease terms from 1-18 months. These arrangements give you written contracts, verified properties, and all-inclusive pricing without locking you into rigid timelines.

Whatever you choose, make sure you understand your agreement fully before signing. Read every clause, ask questions about anything unclear, and know your rights under local tenant laws. The difference between a great rental experience and a terrible one often comes down to understanding exactly what you’re agreeing to from day one.

Ready to find your next home? Whether you need a traditional lease, month-to-month flexibility, or something in between, understanding these concepts ensures you’ll make the choice that’s right for your situation.

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