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

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Other Words from lease

Verb

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

Rimel’s Del Mar closed in 2018 and Rimel’s La Jolla closed Aug. 18 when its lease was not renewed. Pam Kragen, San Diego Union-Tribune, "Three North County restaurants to bow out this weekend," 30 Aug. 2019 The company is targeting the oil-rich Halley field on its Halley SM lease roughly eight miles south of Kermit. Sergio Chapa, Houston Chronicle, "Drilling Down: Exxon Mobil shows no sign of cooling off in Permian Basin," 26 Aug. 2019 When her lease expired at the end of the month, it would not be renewed. Brian Goldstone, The New Republic, "The New American Homeless," 21 Aug. 2019 In a follow-up interview, Moore said the city has no plans to renegotiate its lease with McCormick Air, which runs through 2044. Lex Talamo, The Seattle Times, "Yakima officials decide they’re OK with ICE continuing to use airport for detainee flights," 20 Aug. 2019 Rigby, Baron Aldrine, Mike Cleary, Mike Kay and Pete Danna represented Spaces in its new Dallas' location leases. Steve Brown, Dallas News, "Another coworking operation is coming to Plano's Legacy business park," 19 Aug. 2019 Its leases are typically held in special-purpose entities specific to one property (so a blow-up insulates the parent firm). The Economist, "WeWork unveils its IPO prospectus," 15 Aug. 2019 But one major thing that could cause some stir in WeWork's financials is their leases. Anne Sraders, Fortune, "5 Things to Watch For as You Read WeWork’s IPO Filing," 14 Aug. 2019 Electronic Arts could break its lease in Maitland as early as Oct. 31, 2021, thanks to a clause added five years ago, potentially setting up a move to Creative Village downtown. Marco Santana, orlandosentinel.com, "EA lease allows it to leave Maitland in 2021. Could it move to downtown Orlando?," 13 Aug. 2019

Recent Examples on the Web: Verb

The portfolio, which is 96 percent leased, offers affordable rental options for residents in Dallas-Fort Worth, Houston and across Florida, according to Starwood Capital. Katherine Feser, Houston Chronicle, "Starwood Capital buys apartments in Texas, Florida," 27 Aug. 2019 Space in the tower is 76 percent leased, with Ally Financial occupying more than 400,000 square feet. William Thornton | Wthornton@al.com, al.com, "Brasfield & Gorrie celebrates construction milestones in two states," 18 July 2019 The building is currently 95 percent leased/occupied, according to Charles Perkins, Arlington Heights director of planning and community development. Elizabeth Owens-schiele, chicagotribune.com, "Construction to being soon on next phase of Arlington Downs development after trustees give approval to final proposal," 24 June 2019 The resulting Spectra Plaza is 96 percent leased, according to recent statistics from CRDA. Kenneth R. Gosselin, courant.com, "Pearl Street apartments riding latest wave of new rentals in downtown Hartford," 16 June 2019 The new Barry’s will open in a 4,500-square-foot space on the ground floor of 700 Santana Row, a sleek new office building that is fully leased to up-and-coming tech firm Splunk. George Avalos, The Mercury News, "Barry’s Bootcamp gets ready to open at San Jose’s Santana Row," 21 Aug. 2019 The two companies agreed that Walmart would lease or license its roof space to Tesla (TSLA) for the solar panels in exchange for lower energy costs, and Tesla would retain ownership of the panels and handle their maintenance, the filing states. Clare Duffy, CNN, "Walmart sues Tesla after it says solar panels caught fire on store roofs," 20 Aug. 2019 The city owns 12 Circulator buses and is leasing six cut-away minibuses from RMA, Penny said. Colin Campbell, baltimoresun.com, "Charm City Circulator ridership plunges after bumpy transition to new operator," 15 Aug. 2019 The tower is now leased to tenants including Omnitracs, Kibo Software, Active Network and Telepacific Communications, county tax records show. Steve Brown, Dallas News, "Dallas skyscraper owner raided by FBI," 15 Aug. 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.

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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

12 Sep 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 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

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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

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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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