Lease

A lease, also referred to as a tenancy, is the right to occupy property.  This right can either apply to personal property and/or real property.  These rights are given to the tenant.  In the real estate industry, the lessee terms the tenant a “lessor.”  A lease consists of a fixed period of time such as a year and is justified with payments from the lessee to the lessor.  A lease is established and confirmed with a legal document that gives the right for the lessee to obtain the land and/or structure for that fixed period of time.  In a lease agreement, lessees and lessors agree upon certain clauses, conditions, and rules for their lease agreement.  In the event these rules are not upheld, a breach of contract occurs.  From this breach of contract, discontentment all the way to civil litigation may occur.

There are two types of property that can include a lease.  These types of properties include real property and personal property.  Real property includes any permanent feature on a specific piece of land.  This can include structures above and/or below the land.  Personal property can include tangible as well as intangible property.

There are also leases consisting of many different types of leases.  A few of these include a flat or fixed lease, a gross lease, and a net lease.  A flat or fixed lease is a rental set for a specific period of time.  A gross lease includes a flat monthly payment from the tenant as the property owner or lessor maintains the building operating costs.  This type of lease gives the property owner the ability to increase the rent each year based on needs for enlarged expenses.  A net lease includes monthly rent plus expenses.  The rent in a net lease can also increase based upon the property owners increased costs.

When looking into contracting into a lease agreement, the type of lease is an important piece of information.  Along with the type of lease, the terms and conditions of the lease are vitally important to potential lessees.  Selecting the right lease location, contract, and terms is an experience many individuals face during their lives, but with the help of a capital investments advisor, these decisions do not need to be fraught with anxiety, concern, or fear.

Do you have Lease questions? Contact one of our Capital Investment Advisors with your Lease questions to get the answers you need to make informed financial decisions.

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