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A lessee contracts to use property or equipment for a specified period of time, governed by a lease. Both parties have specific rights, privileges, and responsibilities, and termination rights may be provided. Prospective renters should read the lease thoroughly and seek clarification.
The lessee is the party in a commercial transaction that contracts for the use of property or equipment for a specified period of time. The transaction is governed by the terms and conditions documented in a lease. In exchange for the privilege of using the equipment or property for the term of the lease, the lessee agrees to pay the owner or lessor regular payments in accordance with the terms specified in the lease.
While the term can be used in any type of rental or lease situation, the idea of a tenant is generally associated with the long-term rental of a property, such as a house or apartment. The terms of the lease typically give the tenant and the property owner specific rights, privileges, and responsibilities. As long as both parties fulfill their obligations, the landlord-tenant relationship is usually positive.
With equipment rentals, the length of the lease can be shorter, even a few days. While the equipment is in the lessee’s control, he or she is expected to exercise due diligence in the use of the equipment, while taking reasonable steps to protect it from harm. When the equipment is returned to the lessor, the equipment is often inspected. If it is in good working order, the terms of the lease are considered fulfilled and the transaction is complete.
It is not unusual for any lease to provide termination rights to both the landlord and the tenant. For example, a tenant can withdraw a lease early if an employer transfers the tenant to another city. At the same time, the property owner may choose to terminate a lease early for a tenant’s breach of the terms and conditions of the lease. Non-compliance may involve factors such as non-payment of rent or violation of prohibitions on keeping a pet or violating clauses related to excessive noise. Generally, a lease provides protection for both parties, making it possible for both the lessee and the landlord to end the business relationship if either party fails to fulfill their commitment.
Before signing any lease, a prospective renter should read the provisions of the document thoroughly. If there are clauses or sections that he or she does not understand, it is important to seek clarification before entering into the lease. This will help avoid the possibility of misunderstandings regarding the responsibilities and privileges assumed by both parties during the duration of the agreement, and will help keep the business relationship cordial.
Smart Asset.
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