A lease agreement is an arrangement, made between two parties, that allows one of those parties to use an asset belonging to the owner. Typically, lease agreements are used for real properties, but they are also used for rentals of vehicles, household appliances, construction equipment, and other items.
A lease agreement is a legal contract designed to protect both the person leasing the asset (“lessee”) and the owner of the asset (“lessor”). To explore this concept, consider the following lease agreement definition.
A lease agreement is a legal contract used when a party conveys land or personal property to another party for a specific amount of time in return for payment. The lease agreement outlines all of the aspects of the lease arrangement so that each party understands his rights and obligations under the lease. Formal lease agreements are legally binding on both parties, and breach of the agreement, or failure to uphold the provisions of the agreement, has legal consequences.
There are six basic types of Real Property Lease Agreements as follows:
- Ground Leases
- Office Leases
- Retail Leases
- Industrial Leases
- Other Commercial Leases
- Residential Leases