True Lease

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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.

INVESTOPEDIA EXPLAINS 'True Lease'

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.

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  1. Can unearned rent be considered deferred revenue?

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  2. What are the three "nets" of an NNN lease?

    A triple net (NNN) lease is a type of real estate lease in which the tenant is responsible for paying the building's property ... Read Full Answer >>
  3. What are the differences between single, double and triple-net leases?

    A net lease is a real estate lease in which the tenant pays, on top of his rent, one or more of the following expenses: property ... Read Full Answer >>
  4. Can you ask your landlord to remove a waiver of subrogation clause from your lease?

    You can ask your landlord to remove a waiver of subrogation clause, but you will both need to agree to its removal or the ... Read Full Answer >>
  5. Do landlords set up escrow accounts for their tenants' security deposits?

    Landlords must set up escrow accounts to hold tenants' security deposits if the accounts are required by the laws of the ... Read Full Answer >>
  6. Is a waiver of subrogation clause better for a tenant or a landlord?

    A waiver of subrogation clause is good for both a tenant and a landlord. A waiver of subrogation is a two-way agreement in ... Read Full Answer >>
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