A lease is a contractual agreement which conveys the use of a property from the owner to another party for a set term and rent. The owner of the property is called the lessor, or landlord. The person who is renting the property is called the lessee, or tenant.
While the rights and responsibilities of lessors may vary from country to country, there are certain commonalities. In all cases, the lessor remains the owner of the property, and he alone benefits from any appreciation that may be realized if the property is sold. He also has the right to receive the agreed upon rent in a timely fashion and to be compensated for damage caused by the tenant. In all cases, he has the right to expect the property to not be used in an illegal manner.
In exchange for rent, the lessee has the right to enjoy the property in private. The lessor does maintain limited rights of entry for specific purposes, such as performing regular maintenance or repairs. This must be done at a reasonable hour and with prior notification to the tenant. In some countries, a phone call is sufficient; other jurisdictions require written notification via a prescribed form. In the case of an emergency which threatens to damage the property, such as a flood or fire, the notification requirements are waived.
The lessor has a right to set the terms of the rental agreement as long as it complies with the applicable laws governing tenancy. The United States gives great latitude in the nature of the rental agreement, while other areas, such as Queensland, Australia, require specific government approved forms. The landlord has the right to evict a tenant in certain circumstances as well, including delinquency of rent, unlawful use of the premises, or willful damage caused by the tenant.
Being a landlord also carries certain responsibilities. The lessor is expected to maintain the property in a manner that complies with local health and safety regulations. He must also respect the privacy of the tenant. Once the lease has been signed, he is bound to the terms, such as the amount of the rent, until the lease has expired. As owner of the property, it is also his responsibility to pay all assessed taxes.
Prior to signing a lease, it is important that both the lessor and the lessee examine the property for any existing damage or blemishes. A list should be made of any imperfections, such as a stain on the floor, or a broken cupboard handle. Both parties should sign the checklist. When the lease has ended, both parties should once again examine the property to determine if any additional damage has occurred for which the tenant is liable.
The lessor generally requests a damage deposit at the time the lease begins. This deposit is expected to be returned to the lessee at the termination of the lease minus any amount for damages or past due rent. Local jurisdictions may govern what charges are deductible, though normal wear and tear is generally considered the responsibility of the owner. The deposit is usually required to be returned in a specified amount of time, or the landlord may be held liable for damages.
A lease is a legally binding document, so it is important that both parties are very clear regarding its terms and conditions. Prior to becoming a lessor, it is a good idea for a person to familiarize himself with any applicable government regulations. Being well-informed can make the experience more enjoyable and profitable.