Lease

Loading the player...

What is a 'Lease '

A lease is a legal document outlining the terms under which one party agrees to rent property from another party. A lease guarantees the lessee (the renter) use of an asset and guarantees the lessor (the property owner) regular payments from the lessee for a specified number of months or years. Both the lessee and the lessor must uphold the terms of the contract for the lease to remain valid.

BREAKING DOWN 'Lease '

Leases are the contracts that lay out the details of rental agreements in the real estate market. For example, if you want to rent an apartment, the lease will describe how much the monthly rent is, when it is due, what will happen if you don't pay, how much of a security deposit is required, the duration of the lease, whether you are allowed to have pets, how many occupants may live in the unit and any other essential information. The landlord will require you to sign the lease before you can occupy the property as a tenant.

RELATED TERMS
  1. True Lease

    A specific type of multi-year lease which does not pass on ownership ...
  2. Sandwich Lease

    A lease in which a party rents property from the property owner ...
  3. Bargain Renewal Option

    A clause in a lease agreement that gives the lessee the option ...
  4. Triple Net Lease

    A lease agreement that designates the lessee (the tenant) as ...
  5. Minimum Lease Payments

    The lowest amount that a lessee can expect to make on a lease ...
  6. Open-End Lease

    A rental agreement that obliges the lessee (the person making ...
Related Articles
  1. Investing

    How Does an Operating Lease Work?

    Operating lease is a term used mostly in accounting to denote a lease that gives the lessee rights to use and operate an asset without ownership.
  2. Personal Finance

    Why You Should Buy A Car Instead Of Leasing

    While leasing has certain advantages, buying a car tends to save you money in the long run and offers greater flexibility.
  3. Personal Finance

    Is There a Way to Get Out of Your Car Lease Early?

    For those who no longer want their car for whatever reason, transferring the lease to an interested party can be a particularly appealing choice.
  4. Personal Finance

    How Does a Modified Gross Lease Work?

    A modified gross lease is a rental agreement where, in addition to their rent, tenants pay a share of other costs associated with the property.
  5. Investing

    Uncovering Hidden Debt

    Understand how financing through operating leases, synthetic leases, and securitizations affects companies' image of performance.
  6. Personal Finance

    Renters' Guide: The Rental Process

    Finding the ideal rental property can be time consuming. Knowing what to expect can help ensure a smooth process. View PropertiesWhile there are times when people must rent a property sight-unseen, ...
  7. Managing Wealth

    New Wheels: Lease Or Buy?

    These two major ways to obtain a car have very different advantages and drawbacks. Find out which is best for you.
  8. Managing Wealth

    4 Ways to Get the Best Deal on a Car Lease

    Car buyers typically negotiate when purchasing a vehicle, but many don't negotiate when leasing a car. There are several ways to save if you ask.
  9. Personal Finance

    The Complete Guide To Becoming A Landlord: Landlord-Tenant Relationship

    A lease establishes the relationship of landlord and tenant and is both a conveyance of a possessory estate in real property and a contract between the parties. Through the lease, the tenant ...
  10. Personal Finance

    Your Lease Is Up: When Should You Buy The Car?

    In general, the fact that you know the car is to your benefit. Before deciding, compare the buyback price to what the car would go for on the open market.
RELATED FAQS
  1. What are the differences between single, double and triple-net leases?

    Learn the ins and outs of net lease agreements, including the key differences between single net, double net and triple net ... Read Answer >>
  2. How have low interest rates affected lease rates in the automotive sector?

    Find out how and why lower interest rates for leasing new automobiles have helped spur more consumers to lease cars instead ... Read Answer >>
  3. You are currently reviewing the following information for JKL Corp ...

    Free info on financial certification exams including study guides, exam questions, and much more! Read Answer >>
  4. At the beginning of the year, HIJ Corp. began to lease new equipment ...

    The correct answer is: b) Total Lease Payment = Interest expense + Principal repayment Step 1: Interest expense = 8.5% of ... Read Answer >>
  5. What are the three "nets" of an NNN lease?

    Learn what the three "nets" are in an NNN lease and how they affect the responsibilities of both landlord and tenant in a ... Read Answer >>
  6. What types of assets may be considered off balance sheet (OBS)?

    Learn about what types of assets are often accounted for using the off-balance-sheet method and why this accounting technique ... Read Answer >>
Trading Center