What does leasing involve in a real estate context?

Leasing in a real estate context specifically refers to a contract where a property owner (the lessor) grants a tenant (the lessee) the right to use the property for a specified period, typically in exchange for periodic payments, often referred to as rent. This arrangement establishes the legal rights and obligations of both parties concerning the use of the property. The lease details the duration of the agreement, rental amounts, and the responsibilities related to property maintenance and utilities, among other factors.

This definition is critical because it highlights the temporary nature of leasing compared to ownership or other forms of property agreements. Unlike an outright sale, which involves transferring ownership rights permanently, leasing allows for the use of the property while maintaining ownership with the lessor. It also differs from agreements for property management, as leasing involves a direct relationship between the property owner and the tenant rather than engaging a third party to manage the property. Similarly, leasing is not a mortgage agreement, which involves securing a loan with the property as collateral rather than permitting tenant occupancy in exchange for rent.