lease

Definition:

a contract between two persons, called ‘lessor’ and ‘lessee’, by which the lessee is granted the right to exclusive possession and use of a tangible thing which is the lessor’s property and this right is granted for a definite period of time (called the ‘term’). The lessor retains title to the thing leased, and the right to use and possession of the thing reverts to the lessor at the end of the term. The payment to be made by the lessee as consideration for the right to use the property is called ‘rent’ or ‘rental’. The lessee has the right to exclusive possession for the term of the lease but may, in principle, grant that right to another person under a further lease (called a ‘sublease’) though this is forbidden by the provisions of many leases. It is common for a lease to be renewed at the end of its term for a further term of the same or a different duration. A lease may contain a provision by which it will be renewed automatically at the end of each term for a further term of the same length unless either party gives notice to the contrary – such a lease is called a ‘periodic lease’.



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