lease

noun
\ ˈlēs How to pronounce lease (audio) \

Definition of lease

 (Entry 1 of 2)

1 : a contract by which one conveys real estate, equipment, or facilities for a specified term and for a specified rent took out a five-year lease on the house also : the act of such conveyance or the term for which it is made
2 : a piece of land or property that is leased
3 : a continuance or opportunity for continuance a new lease on life

lease

verb
leased; leasing

Definition of lease (Entry 2 of 2)

transitive verb

1 : to grant by lease
2 : to hold under a lease

Keep scrolling for more

Other Words from lease

Verb

leasable \ ˈlē-​sə-​bəl How to pronounce leasable (audio) \ adjective

Synonyms for lease

Synonyms: Verb

let [chiefly British], rent

Visit the Thesaurus for More 

Choose the Right Synonym for lease

Verb

hire, let, lease, rent, charter mean to engage or grant for use at a price. hire and let, strictly speaking, are complementary terms, hire implying the act of engaging or taking for use and let the granting of use. we hired a car for the summer decided to let the cottage to a young couple lease strictly implies a letting under the terms of a contract but is often applied to hiring on a lease. the diplomat leased an apartment for a year rent stresses the payment of money for the full use of property and may imply either hiring or letting. instead of buying a house, they decided to rent will not rent to families with children charter applies to the hiring or letting of a vehicle usually for exclusive use. charter a bus to go to the game

Examples of lease in a Sentence

Noun

They took out a five-year lease on the house. We hold leases on both of our cars.

Verb

She leases a red convertible. I have leased this house for the last four years. We leased the house to a young married couple.
See More

Recent Examples on the Web: Noun

The company last month signed a 10-year lease for 463,000 square feet at the massive, long-vacant building. Chicago Tribune Staff, chicagotribune.com, "Daywatch: Pregnant woman killed weeks after testifying in cousin’s slaying, Uber’s ‘big bet’ on Chicago and other things to know to start your day," 10 Sep. 2019 When the 2020 season begins next June, the franchise will have a new name, begin a new 10-year lease with the city of Norwich, and, city and franchise officials hope, the controversy that shadowed the team throughout August will be resolved. Dom Amore, courant.com, "As season ends, Connecticut Tigers work to end political controversy, reboot and get back to business of baseball," 2 Sep. 2019 Among the accusations made by Revolution Fitness is that B.E.E. Holdings breached a 10-year lease signed in 2014 that gave the fitness center the right of first refusal in the sale of the property on Round Bottom Road. Jeanne Houck, Cincinnati.com, "Judge: Doug Evans' fraud convictions relevant in unrelated trial," 22 Aug. 2019 In December, the three entities entered into a 10-year lease, in which the Kings and ASEC will be the rink’s new operators. Anthony Clark Carpio, Burbank Leader, "Burbank, Los Angeles Kings officials celebrate grand reopening of ice center," 16 Aug. 2019 Residents claim park managers promised the park had a 99-year lease on the property with the Salt River Pima-Maricopa Indian Community. Claire Rafford, azcentral, "Mobile-home residents of Roadrunner Lake Resort kicked out of park after lease expires," 10 Aug. 2019 The real-estate companies working on a land deal for the facility have signed a 75-year lease for the site to be used for Space Hub Sutherland, TechCrunch reports. Eric Berger, Ars Technica, "Rocket Report: Catching a falling fairing, Delta IV Heavy may stop in 2024," 9 Aug. 2019 The measure also would allow for a 99-year lease with the developer to control adjoining retail space that would be built on Old Woodward north of Maple Road. Bill Laitner, Detroit Free Press, "Silenced Birmingham residents finally get their moment to speak. Here's what happened.," 6 Aug. 2019 In August of 2018, Kushner Companies announced that Brookfield Asset Management had taken a 99-year lease on 666. The Editors, Town & Country, "8 Things You Should Know About the Kushner Family," 25 July 2019

Recent Examples on the Web: Verb

Excess space can also be leased to other tenants for a profit. Roland Li, SFChronicle.com, "Office rents are so high that Bay Area businesses are buying buildings," 15 Sep. 2019 Both buildings are leased to Nvidia, a maker of chips used for high-performance tasks such as video games. George Avalos, The Mercury News, "Google-leased Mountain View office building entices big investor," 13 Sep. 2019 The Echo Park land has been leased by the nonprofit El Centro del Pueblo, which provides youth and family services aimed at preventing gang violence, for recreational space including basketball and handball courts. Emily Alpert Reyes, Los Angeles Times, "An Echo Park lot could become homeless housing after a bitter clash at City Hall," 11 Sep. 2019 This area dates back to the 1760s when the houses were leased to slaves, mainly brought from Malaysia, Indonesian, and India, and known as Cape Malays. BostonGlobe.com, "A taste of the red-hot food scene in Cape Town - The Boston Globe," 10 Sep. 2019 Outdoor walkways and plazas around the convention center that link to the Connecticut Science Center should be more fully used and could be leased to restaurants for food concessions, generating more revenue. Kenneth R. Gosselin, courant.com, "Study: Hartford’s convention center needs another hotel, local convention bureau and better use of outdoor promenades," 9 Sep. 2019 The property is fully leased by Ferguson Waterworks. Kathy Jumper, al, "Investors buy Serda building," 8 Sep. 2019 The land was leased with minimal local consultation by the now defunct Marsabit County Council. Zoe Cormack, Quartz Africa, "Kenya’s huge wind power project might be great for the environment but not for local communities," 3 Sep. 2019 In Colorado, more than 95 percent of the lands are leased for agriculture. Judith Kohler, The Denver Post, "In time for hunting season, state agencies open more trust lands to sportsmen," 3 Sep. 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'lease.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

See More

First Known Use of lease

Noun

14th century, in the meaning defined at sense 1

Verb

circa 1570, in the meaning defined at sense 1

History and Etymology for lease

Noun

Middle English les, from Anglo-French, from lesser

Verb

Anglo-French lesser, laisser, lescher to leave, hand over, lease, from Latin laxare to loosen, from laxus slack — more at slack

Keep scrolling for more

Learn More about lease

Statistics for lease

Last Updated

18 Oct 2019

Look-up Popularity

Time Traveler for lease

The first known use of lease was in the 14th century

See more words from the same century

Keep scrolling for more

More Definitions for lease

lease

noun

Financial Definition of lease

What It Is

A lease is an agreement, usually in writing, between the owner of an asset and a lessee.

How It Works

Leases can be for a variety of assets, though real estate often comes to mind first. For example, let's say John Doe owns a house on Main Street. He does not live in the house; he decides to lease it to Jane Smith. John continues to be the owner of the house, but Jane agrees to pay John $800 a month in return for letting her live there for a year. They type up a lease, which sets forth the exact dates Jane can live in the home, what improvements or changes Jane is allowed to make to the home, and what happens if Jane damages the home.

Leases can also be for cars, manufacturing equipment, office space, photocopiers, musical instruments, solar panels, or virtually any other asset. Generally, leases are handy when one party has the capital to purchase the asset and another party does not have the capital to do so but would like access to the asset.

Why It Matters

There are many kinds of leases. Some allow the lessee to buy the asset at the end of the lease term, some do not, for example. Regardless, a lease is a legal contract, and violating a lease can result in monetary damages or other remedy by a court. Generally speaking, leases set forth the lease dates, the payments required, and guarantees that the lessor actually owns the asset that he or she is leasing to the lessee.

Accounting for leases can be complicated. There are two general types: operating leases and capital leases. An operating lease is simply a lease on an asset that does not give the lessee rights similar to those of an owner of the asset. Generally, lease payments made under a capital lease go on the income statement and thus reduce profits.

A capital lease is the opposite—it gives the lessee rights similar to those of an owner of the asset. Generally, lease payments made under a capital lease are recorded on the balance sheet and thus do not reduce profits.

GAAP rules state that to determine whether the lease is an operating lease, the lease must not have any of these characteristics:

1The life of the lease must not be longer than 75% of the life of the asset.
2The lessor cannot transfer ownership of the asset to the lessee at the end of the lease term.
3There cannot be an option to purchase the asset at a "bargain price" at the end of the lease term.
4The present value of the lease payments cannot exceed 90% of the fair market value of the asset.

Source: Investing Answers

operating lease

noun

Financial Definition of operating lease

What It Is

An operating lease is simply a lease that does not give the lessee rights similar to those of an owner of the asset.

How It Works

Let's assume Company XYZ needs a widget machine for its factory. The widget machine costs $1,000,000 to buy, but Company XYZ could also lease the widget machine for $2,000 a month instead. This certainly could preserve a considerable amount of cash for the company. If Company XYZ enters into an operating lease for the asset, it also will not assume any of the risks of ownership by leasing the machine rather than buying it. However, it will have to record all of the lease payments on its income statement (thereby reducing its net income) rather that placing the asset on its balance sheet and recognizing only depreciation on the income statement.

Why It Matters

The buy-versus-lease question is one of the most common in the business world. There are considerable tax and income advantages and disadvantages on both sides, as there are for the operating-versus-capital lease decision.

The payments on an operating lease must be expensed, meaning the lease payments must be recorded on the income statement and thus reduce net income. The asset does not appear on the lessee's balance sheet in an operating lease. This is a different accounting treatment than what would be the case for a capital lease, whereby the lessee enjoys rights that are usually only reserved for someone who actually owns the asset (in that case, the lease payments are capitalized, meaning they appear on the balance sheet instead and thus do not affect net income).

There is certainly the temptation to structure a lease contract such that Company XYZ's lease payments are essentially a series of installments toward the purchase of the asset over time, thereby making Company XYZ the owner at the end of the lease term. But GAAP rules see through most schemes to make asset purchases look like leases. Thus, GAAP rules state that to determine whether the lease is an operating lease, the lease must not have any of these characteristics:

1The life of the lease must not be longer than 75% of the life of the asset.
2The lessor cannot transfer ownership of the asset to the lessee at the end of the lease term.
3There cannot be an option to purchase the asset at a "bargain price" at the end of the lease term.
4The present value of the lease payments cannot exceed 90% of the fair market value of the asset.

Source: Investing Answers

lease

noun

English Language Learners Definition of lease

 (Entry 1 of 2)

: a legal agreement that lets someone use a car, house, etc., for a period of time in return for payment

lease

verb

English Language Learners Definition of lease (Entry 2 of 2)

: to use (something) for a period of time in return for payment
: to allow someone to use (something) for a period of time in return for payment

lease

noun
\ ˈlēs How to pronounce lease (audio) \

Kids Definition of lease

 (Entry 1 of 2)

1 : an agreement by which a person exchanges property (as a car or house) for a period of time in return for payment or services
2 : a piece of property that is leased

lease

verb
leased; leasing

Kids Definition of lease (Entry 2 of 2)

: to give or get the use of (property) in return for payment or services

Keep scrolling for more

lease

noun
\ ˈlēs How to pronounce lease (audio) \

Legal Definition of lease

 (Entry 1 of 2)

1a : a contract by which an owner of property conveys exclusive possession, control, use, or enjoyment of it for a specified rent and a specified term after which the property reverts to the owner also : the act of such conveyance or the term for which it is made — see also sublease — compare easement, license, security interest at interest sense 1, tenancy

Note: Article 2A of the Uniform Commercial Code, which governs leases where adopted, defines lease as “a transfer of the right to possession and use of goods for a term in return for consideration.”

building lease
: ground lease in this entry
consumer lease
: a lease made by a lessor regularly engaged in the selling or leasing of a product to a lessee who is leasing the product primarily for his or her personal or household use
finance lease
: a lease in which the lessor acquires goods from a supplier in accordance with the specifications of the lessee

Note: Under section 2A-103 of the Uniform Commercial Code, before the lessor signs the lease or the lease becomes effective, the lessee must receive a copy of or approve of the contract by which the goods were acquired or must receive a statement of terms (as warranties, disclaimers, and liquidated damages) relating to the contract or notification of where such information can be obtained.

ground lease
: a lease of land usually for a long term in consideration of the payment of rent and with the agreement that the lessee build or improve a structure on the land

called also building lease

mineral lease
: a lease granting the right to work a mine and extract the minerals or other valuable deposits from it under prescribed conditions (as of time, price, or royalties)

called also mining lease

net lease
: a lease requiring the lessee to assume all operation expenses (as for maintenance, insurance, and taxes) in addition to the payment of rent
operating lease
: a lease of property and especially equipment for a term which is shorter than the property's useful life and in which the lessor is responsible for certain expenses (as taxes)
perpetual lease \ pər-​ˈpe-​chu̇-​wəl-​ \
: a lease renewable forever at the lessee's option
proprietary lease
: a lease used to convey to a member of a cooperative the exclusive possession of a residential unit
true lease
: a lease that resembles a security agreement but retains the attributes of a lease
b : property and especially real property that is leased
2 in the civil law of Louisiana : a contract by which a person provides labor or services for a price

lease

verb
leased; leasing

Legal Definition of lease (Entry 2 of 2)

transitive verb

1 : to grant by lease to another leases mopeds to tourists
2 : to hold under a lease a company leasing a fleet of cars for its executives

intransitive verb

1 : to be under a lease or subject to a lease the vacation house leases for $500 a week
2 : to grant property by a lease have leased to students in the past

History and Etymology for lease

Noun

Anglo-French les, from lesser to grant by lease, from Old French laisser to let go, from Latin laxare to loosen, from laxus slack

Keep scrolling for more

More from Merriam-Webster on lease

Rhyming Dictionary: Words that rhyme with lease

Thesaurus: All synonyms and antonyms for lease

Spanish Central: Translation of lease

Nglish: Translation of lease for Spanish Speakers

Britannica English: Translation of lease for Arabic Speakers

Britannica.com: Encyclopedia article about lease

Comments on lease

What made you want to look up lease? Please tell us where you read or heard it (including the quote, if possible).

WORD OF THE DAY

to be made up of

Get Word of the Day daily email!

Test Your Vocabulary

Where in the World? A Quiz

  • peter bruegel tower of babel painting
  • What language does pajama come from?
Spell It

Can you spell these 10 commonly misspelled words?

TAKE THE QUIZ
Dictionary Devil

Test Your Knowledge - and learn some interesting things along the way.

TAKE THE QUIZ
Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!