Ownership is a concept which emerged when man was still a nomad. In the modern world, it is what defines a person. Ownership of an asset is wealth and a means of making money. The owner can make the use of his assets available to someone, in return of certain payment. This is a process called Leasing.
Leasing allows certain assets or services available to a person, for a specific or non specific period of time-in return of which he must pay a single payment or a series of payments. The document enabling this is called a lease, drawn between the lessee, who is the receiver and the lessor, who is the owner. The payment to be paid in return of the use of the assets or services is called Rent.
The time period or term for which the lease is made for, is its backbone. It can be fixed or unspecified.
• For a fixed term lease, the agreement for use of the asset or service ends as the time period ends. It can then be renewed with the same lessor, or a new one. The property or service can be not leased at all, if the owner wishes, as long as the specified time period of lease has expired.
• There are also some fixed term leases which operate on a condition, for instance the death of a certain individual, involved or not involved in the deal.
• An unspecified or periodic term lease is one that allows the lease to be renewed automatically. This kind of lease usually works on a weekly or monthly term period after which it is renewed.
• Another type of unspecified term lease is when there is a mutual trust or understanding between the parties, a lease can be made which can exist as long as both the parties are willing.
Leasing can be distinguished in two broad types.
• Leasing real estate or property
• Leasing personal property
Owner of land or real estate holds the right to a specific property and a lease can be constituted which allows the lessor or the tenant to observe control over it. The owner of the land is then called the landlord, the lessee is called tenant and the payment for which the lease has been constituted for, is called Rent. The rent in a property lease is usually a fixed monthly amount. Though the lease gives certain control to the tenant, the landlord still holds rights of ownership. This gives the landlord the reign to define all the nuances of the lease. This comes to play in an important way when sub leasing is explored in the agreement. When a tenant is allowed to further lease out the property to a third party, it is called sub leasing. A landlord may or may not allow this in the lease.
Owner of a personal property which is tangible can also allow it to be leased out for a fixed or unspecified time period. The payment or rent in such a lease is often the cheaper option for a lessee. This is because personal property like cars has depreciating value and it is more economical to pay for use, rather than own it. Many offices use this kind of leasing to procure computers and other office equipment for long time periods. Airlines are also known to lease aircrafts from manufacturers in this manner of leasing.