A lease is a contract between two parties, where one party conveys services or property to another party for a specified amount of time in exchange for periodic payments. This lease empowers one party to use an asset and guarantees the leaser regular payments, both parties are legally obligated under a lease. This means that lease is a legal document that can be used in court to enforce an action against any involved party.
Different Types Of Property Leases You Should Know About And Consider
An individual these days can get a lease for almost any tangible property these days including cars, property and even boats! At the same time, there are many different types of property leases that have evolved with time. These leases and there characteristics are mentioned below,
- Fixed or Flat Leases
This is where a single rent is determined for a definitive period of time. This type of leases is normally used for rental leases and other property transactions.
- Gross Leases
This type of lease differs from flat leases as the tenant pays a definitive amount monthly and the landlord pays for all other administrative costs of the property. The tenant will however have to pay for utility bills and such a gross leases normally contains clauses that suit the landlord.
- Step Leases
This type of leases is normally not offered to most tenants; it involves determining a set amount that will apply annually during the leases time span. Basically the increase is to cover any damages that might occur and the amount is determined upon the land lord’s discretion.
- Cost Of Living Leases
This is when the rent of the lease is determined by taking cost of living into perspective. This means that the rent will fluctuate according to changes in inflation rates.
- Net Leases
This type of lease favors the landlord to a certain degree, as the tenant is obliged to pay rent and other expenses at the same time. The amount is determined according to the increase in costs that occur on the landlords behalf.
- Net-Net Leases
This is another common type of lease that basically requires the tenant to pay rent and other expenses such as real estate taxes and insurance premiums as well. These insurance and tax rates are allotted according to the specifications of the property involved.
- Percentage Leases
This type of lease involves the tenant to pay a base amount or a certain percentage of gross income. If the percentage of gross income is higher than the base amount then the tenant will have to pay this percentage instead of the base amount.
So for all the people out there, who are planning on starting a lease for a property, please consider the aforementioned types so that you end up getting a cost effective lease. We would recommend contacting a lawyer who specializes in leases, to ensure that your lease encompasses all of your rights and interests.