What is Lease

Lease is a simple contract between lessor and lessee. Lessor allows to use his asset for getting some amount. This amount is paid by lessee for using the asset of lessor. In general term, it is also called rent agreement. Owner can give his any asset on lease for getting some fees. These assets may be tangible or intangible. In beginning of time, land was given on lease but now anything can be given on lease.

When lessor and lessee agree on some terms of lease, they can do the contract of lease. Lessee will enjoy the use of asset by paying its fees and lessor will enjoy the money which he got for allowing lessee for using his asset. Lease contract may be short term and long term. If land was given on lease, lessee will be called tenant and lessor will be landlord.

In 18th century lease contracts were started. If a person had no land for agriculture purpose, he paid some annual rent and got the land for use from landlord for one year. In modern time, all small assets have started to give on lease if these are free including vehicles and furniture.

Lease contract should be written and in this contract following things must be added.

  • Name and addresses of lessee and lessor.
  • Total period of agreement.
  • Starting date of applying of agreement.
  • Total payment for using of asset
  • Other terms.
Following are main types of Lease 

1. Capital or Finance Lease 
2. Operating Lease
3.  Fixed term Lease 
4. Periodic Lease 
5. Lease at Will

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    Education : What is Lease
    What is Lease
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