What is a lease agreement?

A lease agreement is an arrangement between two parties – lessor and lessee, by which the lessor allows the lessee the right to the use a property owned or managed by the lessor for a specified period of time, in exchange for periodic payment of rentals.
The agreement does not provide ownership rights to the lessee. However, the lessor may grant permission to the lessee to modify or change the property to suit his needs. The lessee is responsible for the condition of the property during the lease period.
Lease agreements may be used for the lease of properties, vehicles, household appliances, construction equipment, and other items.
The lease agreement outlines the conditions of the arrangement so that each party understands his rights and obligations under the lease.
 
 

Contents of a lease agreement:

Common contents of a lease agreement include:

• Names of the lessor and lessee or their agents.
• Description of the property.
• Amount of rent and due dates, grace period, late charges.
• Mode of rent payment.
• Methods to terminate the agreement prior to the expiration date and charges if any.
• Amount of security deposit and the account where it is held.
• Utilities furnished by the lessor and, if the lesser charges for such utilities, how the charge will be determined.
• Amenities and facilities on the premises which the lessee is entitled to use such as swimming pool, laundry or security systems.
• Rules and regulations such as pet rules, noise rules and penalty for violation.
• Identification of parking available, including designated parking spaces, if provided.
• How tenant repair requests are handled and procedures for emergency requests.

 

Terms commonly included in a lease agreement:

Duration: Period for which the lease agreement will be in effect.
Rent: The consideration or payment made by the lessee to the lessor in exchange for the property leased out.
Deposits: The amount of deposit required (if any), the purpose of each deposit, and conditions for return or adjustment of deposit at the end of the lease period.
Terms of Use:  The purpose for which the property is to be used and terms and conditions regarding use of the property.
Utilities:  Which utilities are included in the rent, and which utilities the tenant is responsible for.
Insurance: Whether the lessee is required to ensure the property – this is most often used in commercial rental agreements.
Repairs and Maintenance: Party responsible for repairs and maintenance of the property – lessor or lessee.