A lease agreement is usually a written contract, although some lease agreements are verbal. These contracts are between a person or organization who owns some sort of property and another person or organization who is renting or borrowing the property for a defined length of time.
Function
1. A lease agreement serves to legally protect both parties in the agreement. The payment, deposit and rules listed in the terms of a written lease protect the property owner and the lessee or tenant, providing specific dates, monetary figures and other particulars, to which each party can refer.
Types
2. There are several types of lease agreements. A commercial lease agreement is used when a business is leasing property, such as office space. A residential lease agreement is used by landlords and tenants of a rental property. Lease agreements can be used to lease other property as well, such as vehicles or home furnishings.
Time Frame
3. The time frame listed in lease agreement terms can vary greatly. Month-to-month leases can be renewed by the parties on a monthly basis. Other leases may last for 6 months, a year or longer.
Benefits
4. A property owner can benefit from a lease agreement by earning income on property that might otherwise go unused. A lessee can benefit from a lease agreement by enjoying use of the property without the responsibility or expense of ownership.
Considerations
5. A written and signed lease agreement is typically a legal contract. This means the terms can be upheld in a court of law. It is imperative both parties thoroughly read and understand all terms of a lease agreement prior to signing it to legally protect themselves.
