Different Leasing Agreement Types Over the Years

Leasing agreements differ from each other. Though most leasing agreements follow a standard pattern, stipulations per each agreement are hardly the same. There are actually several types of leasing agreements. Ages ago, leasing property was quite simple. The lessor or landlord would allow the lessee or tenant to use his equipment or land in exchange for payment. Though this the most basic form of leasing, modern business practice has come up with a new way of renting equipment and land. Basically, rent is still paid but what differentiates these agreements is the mode of payment.

Rapidly becoming popular among people is the rent-to-own property. The parties should execute a lease purchase agreement that stipulates that the lessor has the option to buy the land after a certain period of time. Or, it is possible that after a down payment, the lessor will pay installments tantamount to a rent. After complete payment has been made, the title of ownership of the land or equipment will be transferred to the lessor.

Aside from this, leasing agreements could be classified into two: the fixed leasing agreement and the periodic leasing agreement. In both cases, rent is still paid. But in a fixed leasing agreement, the lessor usually pays only once for the use and enjoyment of the lessor's property of pays rents consecutively but cannot be required to vacate or return the property until the period agreed upon lapses. On the other hand, a periodic leasing agreement gives the lessor or landlord the power to compel the lessee or tenant to vacate or return the property as long as due notice is given. This form of lease is the most common.

Under these leasing agreements are several other leasing agreements. There even exists the $1.00 buy-out agreement which is common with government contracts. In this type of lease, a private company provides the construction and operation of an infrastructure like a train for example. Of course, the government will still have to pay rent or will engage in profit-sharing. After a certain number of years, the private company will transfer the ownership of the infrastructure to the government for a value of $1.00.