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

By 2003, when greater security was required, the consulate was relocated, and Soho House acquired it on a long-term lease in 2014, building a stylish modern facility next door for the guest bedrooms. Hamish Bowles, Vogue, "Hamish Bowles Attends Serdar Gülgün’s Opulent Ottoman Ball in Istanbul," 4 Feb. 2019 The Chrysler Building also faces rising costs associated with a ground lease. Keiko Morris, WSJ, "Chrysler Building, a Famed Slice of Manhattan Skyline, Is on the Block," 9 Jan. 2019 But three years later, the young pup has been given a new lease on life, training to become an official K-9 officer. Madeline Farber, Fox News, "Pit bull formerly used in fighting ring joins Virginia police department," 25 Sep. 2018 The series was reborn in 2015 under a new name, MotoAmerica, and now the sport has a fresh lease on life. Mitchell Nicholson, Popular Mechanics, "The Great American Motorcycle Racing Revival," 7 Sep. 2018 More than 270 members of the Rockefeller family have gathered there twice annually for meetings and will continue to do so under a lease with the National Trust. Sam Dangremond, Town & Country, "See Inside the Rockefeller Family's Historic Playhouse," 27 July 2018 The SoccerCity initiative proposes a 99-year lease to a group of developers of approximately 233 acres of city property — the stadium site plus adjacent land and non-contiguous property in Murphy Canyon. Phillip Molnar, sandiegouniontribune.com, "Taxpayers association says SoccerCity has bigger tax benefit to city," 12 July 2018 The Maya family signed a 25-year lease for the building, Miguel Danny Maya said, with the intent of being around for the long haul. Benjy Egel, sacbee, "Taqueria Maya owners open Mexican restaurant with a millennial twist in railyard," 12 July 2018 Last week’s late-breaking news that the Frick would be taking over the lease on Marcel Breuer’s Brutalist icon—which has been occupied by an extension of the Metropolitan Museum since 2016—was a real plot twist. Kelsey Keith, Curbed, "The inaugural monthly column from Curbed’s editor-in-chief turns an eye to Postmodernism, following the loss of Robert Venturi," 24 Sep. 2018

Recent Examples on the Web: Verb

At Gawad Kalinga's Enchanted Farm in Bulacan, about 25 miles north of Manila, 50 families built their own two-room homes on land leased from the local government. Rina Chandran, The Christian Science Monitor, "Slum dwellers in the Philippines build homes through community programs," 7 June 2018 Built-for-rent communities give them the option to add hundreds of brand new homes that are already leased and operational in one transaction, in cases where the builders want to sell. Jeff Andrews, Curbed, "A brand new single-family neighborhood, where every unit is a rental," 10 Sep. 2018 About a third of the units have been leased, and a fourth are already occupied, says community manager Nicole Neely. Sarah Gish, kansascity, "Saltwater pool, gym, dog spa: Tour downtown KC's new Crossroads Westside Apartments," 27 June 2018 Onstead began leasing and selling L Street Lofts condos in 2008, and lived in the building for two years. Benjy Egel, sacbee, "Golden Road Brewing keeps its neighbors up at night. Is the city partially to blame?," 21 June 2018 Most of those approved by the board have been for two megawatt facilities on 20 acre sites that are leased from local farmers. Susan Demar Lafferty, Daily Southtown, "Will County eyes solar facility at landfill," 20 June 2018 In a former Super Kmart store that was converted into creative office space in east Charlotte, for instance, JLL last year leased 96,000 square feet to Verizon Wireless. Katherine Peralta, charlotteobserver, "Another former big-box retailer is getting a face-lift for an unexpected new use," 14 June 2018 Migrate is set to open this fall in a 2,300-square-foot space at 311 Barrington Ave., the second commercial tenant to lease space in the mixed-use development in as many weeks. Erin Sauder, Elgin Courier-News, "Restaurant featuring a 'global' cuisine to move into downtown East Dundee," 21 May 2018 The Oaks was the second Classic to be established -- in 1779 -- and was named after an estate near Epsom leased to the 12th Earl of Derby in the 18th century. Rob Hodgetts, CNN, "Why the Derby, Oaks, Guineas and St. Leger are known as the Classics," 4 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

8 Feb 2019

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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