True Lease


DEFINITION of 'True Lease'

A specific type of multi-year lease which does not pass on ownership rights of the asset to the lessee. A true lease is an arrangement where the lessor (the person granting the lease) bears both the risks and rewards of ownership of the property. The lessee merely gets to use the property in a rental fashion.


True leases stand in contrast to financial leases. Financial leases pass more of the aspects of ownership on to the lessee, such as maintenance and tax benefits from depreciation. Financial leases are often treated as loans by the IRS, whereas true leases are not.

  1. Leaseback

    An arrangement where the seller of an asset leases back the same ...
  2. Lessor

    The owner of an asset that is leased under an agreement to the ...
  3. Lessee

    The person who rents land or property from a lessor. The lessee ...
  4. Leveraged Lease

    A lease agreement that is partially financed by the lessor through ...
  5. Capital Lease

    A lease considered to have the economic characteristics of asset ...
  6. Deed Of Surrender

    A legal document that transfers property ownership for a specified ...
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