A lease is a legal document - a contract - that binds an owner and a renter to an agreement. In a lease, the owner is labeled as the lessor, while the renter is labeled as the lessee. A lease can be used to lay out the terms and conditions for the use of any asset, from property to cars.
A lease is vital in making the terms of the agreement clear. It contains all the details that governs the use of the asset. The length of the lease or rental is always included in the contract. The length may be short-term or long-term - from a few weeks to years. Usually, short-term leases involve the use of cars. Medium-term and long-term leases usually involve property, such as an apartment or a house. A lease also contains information on the money involved. The monthly payments, security deposit, and advances are all outlined in the lease. More so, other rules and regulations governing the use of the asset are included in the lease.
If the terms in the lease are not met - either by the lessee or the lessor - the repercussions are also outlined in the lease. For example, if the lessee decides to forfeit on the contract before the agreed date, the lessor may have the legal right to keep the security deposit and even collect on the unused months of the lease. These details vary depending on the specific agreement between the lessor and the lessee. Hence, it is very important that you read the lease thoroughly before you sign.
To be legally binding, the lease must be signed by both parties, witnesses, and be notarized as well.