Point Out Lease Agreement, Definition And Basic Knowledge.
Here is the simple definition about the lease finance and meaning of lease. Number of person do not know the basic function and definition of lease. Lease agreement is a legal document and format of lease agreement make according to the rule and regulation of countries law.
Meaning of Lease - property transfer act defines lease as “ A lease of immovable property is a transfer of a right to enjoy such property, made for certain time, express or implied, or in perpetuity in consideration of a price paid or promised, money, share, service value to be rendered periodically on specified occasions to the transferor by the transferee, who accept the transfer on such terms”.
Actually a valid lease means there must be a transfer of right to enjoyment of immovable property.
What is Lease Financing -
This is the process of contract of financing or money lending against the cost of asset. This conditional contract will be done between lessor and the lessee. The particular assets required by lessees, which purchased by the lessor from a manufacturer of such asset opted by the lessee.
Essential part of Lease Financing -
As discuss above lease financing between lessor and lessee. This the contract between two person. The lease financing is based on the asset, equipment and property. During tenure ownership continue with lessor but use of equipment allowed to lessee. Term vary from case to case and fixation of the period of lease is mandatory. Lessee pay to the lessor is the lease rental. Termination will depend on the mutual agreements between them. Otherwise termination is impossible. It may be possible that termination become conditional like mentioned the period, sells to third part etc…
Classification Of Leases -
There are two type of lease count. First finance lease and second is operating lease. Finance lease is very long term lease on fixed assets. All rewards forwarded to asset owner till transfer and operating lease is not a finance lease.
Lease Agreement -
Lease agreement is the agreement, which is completed between lease and lessee. The terms and other details will be in written and mention the period of lease, amount and other details. Both person will sign the documents and follow the mentioned terms and condition. The proper agreement will be ready on stamp paper of prescribed value.
Here I have taken reference from authentic book, because definition can not be changed and modification will be deform the exact meaning of Lease Agreement.