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Lease

Definition of 'Lease'

A lease is an agreement through which the renter receives the right to use an asset, usually a home or a car, for a certain period of time, in exchange of regular payments.

What is a Lease:

The purpose of a lease is to protect both parties and to make the conditions of the contract clear. In this sense, it is common for a lease to include clauses regarding the payment agreed, the penalties for late payments, the length of lease, and other specifications and restrictions. Some leases give tenants the right to sublet, but this does not always apply.

Although it's common to use "lease" and "rental agreement" for the same purposes, some differences arise. Rental agreements are usually closed for shorter periods of time than leases and they renew automatically at the end of the term unless cancelled. Their terms and conditions can be changed provided that a 30-day notice is given in advance. The terms and conditions of a lease can be modified only at the end of the lease period.

Example:

Here's a real-life example from one of the properties researched on PropertyShark:

References:
http://landlords.about.com/od/Landlord101/a/What-Is-A-Lease.htm

Disclaimer:
The glossary is intended to provide real estate professionals and home buyers with a basic understanding of various specialized terms related to legal rights over a property. All terms appear in public records such as ACRIS. We do not take responsibility for the legal accuracy of the definitions provided and ask that use of these explanations in a legal setting be made only after checking with a lawyer or another specialist in the field.