lease

noun
\ˈlēs \

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

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Other Words from lease

Verb

leasable \ˈlē-​sə-​bəl \ adjective

Synonyms for lease

Synonyms: Verb

let [chiefly British], rent

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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.
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Recent Examples on the Web: Noun

Sprint is knocking 50 percent off the price with its Flex lease. Michael Simon, PCWorld, "Preorders open for the Galaxy Note 9 and it'll cost the same anywhere you get it," 10 Aug. 2018 Your lease does not change just because the home’s owner does. Gary M. Singer, Sun-Sentinel.com, "Ask a real estate pro's Gary Singer answers your rental-related questions," 13 July 2018 Its leases are held in special-purpose entities specific to one property, so the parent is somewhat insulated from blow-ups. The Economist, "Big corporates’ quest to be hip is helping WeWork," 12 July 2018 The future of the country’s oldest continuously operating candy company remains uncertain beyond November, when its lease at its Revere headquarters is scheduled to expire. Katheleen Conti, BostonGlobe.com, "Necco’s new owner sued for failing to make final purchase payments," 12 July 2018 Our original five-year lease is up at the end of the year. Tim Smith, baltimoresun.com, "Single Carrot Theatre seeks to raise $55,000 by July 31 to stay afloat," 10 July 2018 His wife returned to Baltimore at the end of her lease in 1838. Washington Post, "Documenting the slave trade past of Baltimore, and Homewood," 28 June 2018 Sebastian said some tenants are still operating out of the Twin Towers, which loom alongside I-65, finishing up their leases. Karen Caffarini, Post-Tribune, "Iconic Star-Plaza Theatre demolition begins in Merrillville," 26 June 2018 The regional chain closed the store when its lease ended because of underperformance, Weis spokesman Dennis Curtin said. Kate Magill, Columbia Flier, "Once again, an Oakland Mills Village Center grocery closes," 25 June 2018

Recent Examples on the Web: Verb

Located at 1010 West Trade St., Centric Gateway opened in December and is about 43 percent leased, Dominion Realty Partners executives said. Ely Portillo, charlotteobserver, "A multimillion-dollar deal shows why Charlotte’s apartment boom is still going strong," 13 July 2018 Last spring, Patrick Campbell, vice president of development for The Related Group, the developer, said the building was 75 percent leased after having opened in the latter part of 2017. David Lyons, Sun-Sentinel.com, "At 85 stories, Miami's Panorama Tower offers tenants stunning views, lofty monthly rents," 2 July 2018 The commercial space, which is 85 percent leased, and parking structure were sold to Hempel Cos. and Interstate Parking LLC, Irgens said. Tom Daykin, Milwaukee Journal Sentinel, "Downtown Milwaukee Grand Avenue mall buys neighboring office/retail space, parking ramp," 2 July 2018 Following Tuesday's Presley ceremony, Flaherty & Collins will offer public tours of 360 Market Square from noon to 2 p.m. Moore said the 28-story building is nearly 60 percent leased. David Lindquist, Indianapolis Star, "Elvis Presley plaque is coming back to Indianapolis on 41st anniversary of final concert," 22 June 2018 The tower is 94 percent leased by tenants, including law firm Greenberg Traurig, AAA and Cisco Systems. Catherine Reagor, azcentral, "Priciest office sale of the year: Phoenix office tower bought for $100M," 15 June 2018 The $20 million building from the Gardner Co., with 120,000 square feet of space, is about 50 percent leased, said David Wali, an executive vice president with Gardner. John Sowell, idahostatesman, "Now it's a Downtown Boise parking lot. Soon it may be a 10-story building with a park," 12 June 2018 Tere Blanca, president and CEO of Blanca Commercial Real Estate, said the two retail/office towers that comprise MiamiCentral are 75 percent leased, with tenants including Ernst & Young, Cisneros Group and Florida East Coast Realty. Rene Rodriguez, miamiherald, "More people than ever live in downtown Miami — and they're starting to raise families," 29 May 2018 The buildings in the complex date to the mid-1980s and are 84 percent leased to companies including Chiron Technology Services, DSM Nutritional Products, the Maryland Motor Vehicle Administration, Sherwin-Williams and Sushi King. Meredith Cohn, baltimoresun.com, "Columbia Business Center sold for $25.6 million," 1 May 2018

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.

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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

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Statistics for lease

Last Updated

13 Dec 2018

Look-up Popularity

Time Traveler for lease

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

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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 \

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

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lease

noun
\ˈlēs \

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

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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

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