Leasing is one of the activities of an enterprise and is one of the things that management should decide in obtaining a property for operational use. Businesses and individuals may have to decide if leasing a certain property would be more advantageous than acquiring a property outright.

Leasing is deemed a contrary to purchasing or outright acquisition of property. Real property and personal property are types of property in law.

A real property refers to estate or any permanent structure or feature. Aside from land, structures such as buildings, houses, chattels or any immovable properties belong to the category of real property.

On the other hand, personal property refers to the movable properties such as equipment and intangible properties such as patent, copyright and other forms of intellectual property.

Leasing can be seen as the right to utilize a certain property, whether movable or immovable given by a lessor to a lessee or tenant for an indefinite or fixed period of time depending on the agreement between the two parties. The lessor can grant the lessee the exclusive possession of a certain property as long the as the latter pays a determinable or fixed payment to the former.

Leasing involves different levels of interests or rights which include ownership, possession and control or use. The ownership of a certain leased property remains in the hands of the lessor, particularly an original lessor. In a lease agreement, the lessor transfers the possession and control of the property to the tenant or lessee.

Legal documents are normally involved in leasing such as lease agreements, lease assignment, lease termination and estoppel certificate. The nature of lease agreements would vary depending on the kind of property being leased. For instance, a lessee that rents an office space makes a contract with the lessor through an office lease agreement.

The most common kind of leasing of real property is the residential leasing. Renting is another term for leasing and is the most popular word when referring to a residential leasing such as a house, an apartment or condominium. A tenancy agreement or lease agreement may be taken by both parties prior to formal period of leasehold.

A lease agreement can be a formal or informal contract. When the lease agreement is formal, the stipulations on the agreement are deemed to be lawful whereby certain obligations should be met by the lessor and the lessee. There can be implied terms and expressed terms.

In business, leasing has certain advantages and disadvantages. The management’s role is to identify the pros and cons in a given situation to come up with a decision which would be beneficial for the enterprise in short-term and in long-term.

Business managers may have to decide which decision should be most beneficial in obtaining an asset for use in operation. Thus, a manager may have to weigh several elements and data, mostly financial, to come up with a decision of purchasing or leasing a certain property.

When leasing is used in business, it is referred to as commercial leasing.

Leasing would be more preferable to be taken by managers if the capital assets have fluctuating values. Assets with depreciating value and that can only be used for a short period can mostly be obtained on lease.

If there is a capital constraint in business, business owners and managers may decide to rent for an office space or a warehouse facility rather than owning one.

Leasing can make a business more flexible when it plans to increase in size in a relatively short period. In some cases, it could be a more practical option taken by a business owner or manager in a certain situation.

Certain disadvantages may come in leasing a property. When a business desires to move to another office location but its decision is impeded by the existence of a lease contract, the business may decide to have a sublet or to employ tactical legal considerations so it can legally terminate the term. Doing the latter can bring additional costs to the business.

Individuals and businesses should decide at what point and circumstances leasing would be more advantageous. Leasing, in business, is deemed a transaction that should be made legally.