A lease is a legal contract in which the entity entitled to the possession of real property (lessor) transfers those rights to another entity (lessee) for a specified period in exchange for payment called rent.
In real estate, a lessee is an individual or entity that rents or leases property from a lessor. The lessee is responsible for adhering to the terms of the lease agreement, including payment of rent and maintenance obligations.
A lessor is a person or entity that rents out property to another party, known as the lessee, under the terms outlined in a lease agreement. Often referred to as the landlord, the lessor retains ownership of the property while allowing the lessee to use it for a specified period.
An operating lease is an agreement where the lessee leases an asset from the lessor for a certain period but does not assume risks and rewards of ownership.
Qualified Leasehold Improvement Property (QLIP) refers to improvements made to an interior portion of nonresidential real property by a lessor or lessee under a lease, which may be eligible for certain depreciation benefits.
A sandwich lease is a real estate arrangement in which a lessee becomes a lessor by subletting the property. This intermediate leaseholder holds a secondary lease between the property owner and the end user, typically without owning or primarily using the property.
A sublease is a lease agreement between a tenant (lessee) and a third party (sublessee) allowing the sublessee to occupy the leased property. The original tenant remains liable to the landlord for the lease obligations.
Surrender refers to the cancellation of a lease by mutual consent of the lessor and the lessee, where both parties agree to terminate the lease agreement before its stipulated end date.
A tax stop is a clause in a lease agreement that sets a limit on the amount of property taxes the lessor (landlord) is responsible for paying. Any property taxes exceeding this limit are paid by the lessee (tenant).
A tenant is an individual or organization that holds the right to use and occupy real estate property owned by another entity, typically under a lease agreement for a fixed or indefinite period.
