If you’re considering breaking into the property management business, learning about leases is the single most important thing you can do. If you have years of experience in the field, but you’ve always used basic, informal, or verbal rental agreements, there’s no better time than the present to upgrade to a written, comprehensive lease agreement that will help protect your property, your investment, and your livelihood.

Let’s start with the basics. What is a lease? Generally speaking, it’s a specialized form of the standard contract. Rather than spelling out the terms of a sale or a service agreement, the lease documents an agreement to allow the renter (or “lessee”) inhabit the property for a specified period of time.

Most leases spell out the terms of the relationship between the owner/manager of the property and the tenants. Common elements included in lease agreements are the duration of the lease (month-to-month, six months, a year, etc. ), the lease renewal process, rules for the rental property, payment terms, whether pets, smoking, businesses, and other activities are allowed in the property, late-payment and non-payment penalties and procedures, and guidelines for vacating the property and returning the property to move-in condition at the end of the lease.

Based on the needs of both the landlord and the tenant, the terms of a lease can vary considerably. However, it’s important to make sure that the lease agreement you are using is in compliance with all of the local, state, and federal jurisdictions that apply in your area. Otherwise, you may be opening yourself up to legal liability if the lease is ever challenged in court.

As a landlord, you pledge to uphold your end of the responsibilities and duties set forth in the lease, as well as to adhere to the policies and practices you have set forth in the agreement. You also are agreeing not to change the terms of the lease until the current agreement has expired.

Your tenant’s signature on the lease confirms that your tenant will comply with all of the rules and guidelines specified in the document, keep current with rent payments, and leave the property in the manner described in the lease.

A legally-binding lease can be as simple as a basic contract handwritten and signed by both parties, or it can be as comprehensive as a multi-page package covering all aspects of life in the rental property. Some landlords may have gotten into the habit of using simple leases, perhaps believing that it’s just not worth the time and effort needed to create a comprehensive lease package.

However, most legal experts agree that a more comprehensive lease package is your best bet. If your lease agreement does not spell out your exact expectations, you are leaving a lot to chance, and chances are, problems and misunderstandings will inevitably arise. On the other hand, if you rely on a comprehensive lease package that clearly spells out all of your policies and expectations, it is less likely that you’ll end up in court over a dispute. Furthermore, you’ll be less legally vulnerable with a comprehensive lease agreement.

For beginners, leases may be a bit intimidating, but at root, they’re nothing more than specialized contracts. Even more importantly, they’re your best defense against bad tenants. Every minute you invest in the process of building an airtight, comprehensive, legally-binding lease will pay significant dividends down the road.

Section 105 says a lease of a immovable property is a transfer of a right to enjoy property, made for a certain time, express of implied, or in perpetuity, in consideration for a price paid or promised, or of money, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.
The transferor is called the lessor, the transferee is called the lessee, the price is called the premium and the money, share, service or other thing to be rendered is called the rent.
Essentials of lease:
Parties – Lessor and LesseeProperty – ImmovablePeriod – Any period, day, week, month or year or perpetualPremium – Money or any other valuablePartial transfer – Transfer of only right to enjoy 
A lease likewise a sale and a mortgage is a transfer of an interest in specific immovable property but that interest extends only the enjoyment of the property. Rights of ownership are not transferred in a lease.
Duration of the lease:
The essential of a lease is that the right to enjoy the property must be transferred for a certain time, expressed or implied or in perpetuity. The document must itself show when the lease is to operate and for how long it is to remain operative. It may commence either in the present or on some date in future or on the happening of a certain contingency, which is bound to happen e. g. on the determination of a prior lease for life or for a certain no. of years. It may also be expressed to commence from a past date, but that is only for a purpose of computation of the period of the lease. The interest of the lease begins only from the date of execution.
Perpetual lease – A permanent lease can be created by express terms or by implication. Where the words used are not sufficient to create permanency, regard must be had to other terms of the document, the object of the lease, the circumstances under which it was created and the subsequent conduct of the parties. Such consideration will show that a lease without a term is a permanent lease. Whether a lease is permanent or not? The burden of proving it is on the tenant. The court held that a lease in perpetuity can be created, however an interest still remains in lessor. The Supreme Court held that there is no inflexible principle that every variation in the rate of rent payable under a registered deed of lease necessarily implies surrender of the said lease and creation of a new tenancy or that whenever a rate of rent is altered, a new relationship between the parties shall be created.
 
Renewal of lease
The lease may contain a covenant for renewal, i. e. a covenant to grant a renewal of the lease either at the end of the term, or at some stated period within the term. Such a covenant confers an immediate right to a further term. Such a covenant does not create an interest in property and runs with the land, it cannot; therefore infringe the rule against perpetuities.
A covenant for renewal contained in a lease does not ipso facto extend the tenure or term of the lease, but only entitles the lessee to obtain a fresh lease. A lessee has to give a notice of renewal to the lessor within a specified time and if no time is specified then within a reasonable time. It requires the lessee to give notice of his intention to renew the lease before the expiry of the term, or the right of renewal may be lost by not applying within the specified time, though relief will be granted in special circumstances against failure to give notice in time. If no time is mentioned for giving notice, it must be given in a reasonable time.