Lease

A lease is a contractual arrangement where one person agrees to pay another for the use of something they own. This is called a contract between two people: the person who owns the item, called the lessor, and the person who wants to use it, called the lessee. Common things that are leased include property, buildings, vehicles, and even business equipment.

When someone leases an item, they usually make regular payments, like every month, to use it. They also agree to follow certain rules about how they will use the item. For example, someone leasing a car might agree only to use it for personal reasons and not for business.

The term rental agreement can describe different kinds of leases. It might refer to leasing something that you can touch, like a piece of land or a piece of equipment. It can also refer to leasing something you cannot touch, like using a computer program or a radio frequency from a cell-phone provider. Some leases last for a set time, while others can be renewed each month, especially in parts of the United States.

General terms

A lease is a legal contract that can be enforced by everyone involved, based on the contract laws of the place where it is used.

In the United States, a lease is a special kind of contract because it also gives someone the right to use land or buildings.

Leases usually include important details like the names of the people involved, when the lease starts and ends, what is being leased, how much will be paid, and what happens if the lease ends early. Both personal items like cars and furniture, and real estate like land or homes, can be leased. When something is leased, the owner lets the other person use it.

Leases of land

A tenancy is a type of lease where the thing being leased is land, which can include parts of a building, like a floor or a mine. When someone rents land or a building, they often pay extra for services, and sometimes the rent includes all these costs.

Leases can be cancelable, meaning either the person renting or the owner can end the lease early, or they can be non-cancelable, meaning they cannot be ended early. Usually, a lease lasts for a fixed time, called the term. Leases are different from licenses, which let someone use property but can be ended more easily by the owner. In the United States, tenants can sometimes add a clause to their lease giving them the right to buy the property before anyone else.

History of leases of land

For many years, people used leases mainly for farming land. This changed in the late 1700s and early 1800s when cities grew in industrial countries, and leases became important for holding land in cities too.

Today, laws about landlords and tenants still follow old ideas from the 1800s. But because people now know that not everyone has the same power in agreements, many places have laws to help protect tenants. These laws make sure tenants are treated fairly and can’t be removed from their homes without good reason.

Types of tenancies

A fixed-term tenancy lasts for a set period of time, with a clear start and end date. Even though it’s called a “tenancy for years,” it can be for any length of time, like a week or a year. When the fixed term ends, the tenancy stops automatically. If the tenant stays after the lease ends, they might become a tenant at sufferance, meaning they stay without a formal agreement, and either party can end it with proper notice.

A periodic tenancy continues on a repeating schedule, like month-to-month or year-to-year, based on rent payments. Either the landlord or tenant can end this type of tenancy by giving proper notice as required by law. Notice is usually at least one month, but this can vary by location.

A tenancy at will can be ended by either the landlord or tenant at any time with reasonable notice. It doesn’t follow a set schedule and can last for many years but ends when either party decides, for any reason. If the tenant stays after a lease ends without a new agreement, they become a tenant at sufferance, and the landlord can choose to evict them or offer a new, usually month-to-month, lease.

Formalities

Formal rules for a lease depend on the laws and customs of the place where the property is located. For personal items, the rules depend on where the rental agreement is made.

If a lease is for more than one year, it must be in writing to meet legal requirements.

The length of a lease can be fixed, repeating, or open-ended. A fixed lease ends when the time is up, while a repeating lease usually renews monthly or weekly. A lease can also end when a certain event happens, like someone passing away. Either party can end a lease that lasts as long as both agree, without penalty.

Sometimes, a lease can continue past its end date, turning into a month-to-month lease. A tenant can also choose to end the lease early, which is called a "surrender."

There are special rules in New York City about how short a lease can be and whether guests or pets are allowed.

For leases to be fair, the terms must be clear and easy to understand. This means they should be written in plain language, easy to read, and available to everyone involved. Hidden terms in small print or complex language may not be fair.

Rent is required for leases in some places but not others. In some cases, even a very small amount of rent, like a token payment, is enough to meet the requirement.

Whether sharing a property counts as a lease can depend on local laws and how much of the property is shared.

Provisions specific to car rental

When you rent a car, there are special rules you need to follow. For example, you might not be allowed to drive the car off-road, out of the country, or tow a trailer unless you get special permission. In New Zealand, you may need to promise not to drive on Ninety-Mile Beach because of dangerous tides.

You will need to show a driver's license, and only people listed on the rental agreement can drive the car. You might also have the chance to buy extra auto insurance if you don’t already have it. Some rental places might ask for a bond, like holding money on your credit card, until the car is returned in good condition.

You are responsible for any tolls, parking tickets, or traffic violations while renting the car. The rental agreement will also tell you what to do if the car breaks down, gets stolen, or needs to be towed. There may be extra fees if you return the car late, drop it off at a different place, or don’t fill the gas tank before returning it. You might also need to pay a deposit when booking and could get discounts or use vouchers for your rental.

Leasing property

A rental agreement is often called a lease, especially when real estate is rented. Real estate rentals start with a rental application to decide the terms of the lease. Rentals can be for housing, parking for vehicles, storage, business, or other uses.

In a lease, there are two main people: the lessor (sometimes called the owner or landlord) and the lessee (sometimes called the renter or tenant). The lease explains who can live or use the property, what parts of the property are included, how long the rental lasts, and how much rent is paid. It might also talk about rules for pets, repairs, and other important details.

Rentals can be for different lengths of time, like a night in a hotel, weeks, months, or years. Rent is usually paid monthly, but it can be paid in other ways too. Some leases need a security deposit, which is money the renter gives to the landlord to protect the property. This money is returned when the rental ends, unless there are damages.

Sublease

In real estate, a sublease is when someone who is renting a place lets another person rent it from them. This means the original renter becomes like a landlord to the new renter. For example, if a company renting an office space gets too big, they might let a smaller company use part of the office while they move to a bigger space.

The original renter still has to pay the landlord what they agreed to in the original rental agreement. Sometimes, if the rental market changes, the original renter might have to pay extra to the landlord if the new renter pays more, or they might get to keep extra money if the new renter pays less.

Subletting can also be used for cars, where someone who is leasing a car lets another person use it for a certain time. This is not very common but is becoming more popular as a way for people to travel or get around without renting a car the usual way.

Equipment leasing

Leasing is a way for companies to get and use equipment without buying it right away. This includes machines for making things, vehicles, computers, and even airplanes. Many different kinds of businesses use leasing for things like construction tools, medical machines, and farming tools.

Banks and other finance companies usually provide this leasing service to help businesses get the equipment they need.