An agreement, written or unwritten, transferring the right to exclusive possession and use of real estate for a definite period. The lessor (landlord) grants the right of possession to the lessee (tenant) but retains the right to retake possession after the lease term has expired (reversionary right). In effect, the lease is a combination of both a conveyance (To transfer the right of occupancy) and a contract (to pay rent and assume other obligations). It is an exchange of the possession and profits of the land in return for rent. The lessor’s interest called the leased fee estate and consists of the right to recover the contract rent plus the reversion. The lessee’s interest is called the leasehold estate and consists of the right to exclusive use and occupancy of the leased estate. An “agreement for lease “contemplates the execution of a lease at a later time.
Contract law determines the validity of a lease. Although no special wording is necessary to create the relationship of landlord and tenant, a lease should be in writing. If it is not , the law will write it for the parties involved. Although-depending on the circumstances-the lease may be written , oral, or implied , the provision of the statues of the state in wh9ich the real estate is located must be followed. The lessor, being owner of the real estate, is usually bound by an implied covenant of quiet enjoyment for the benefit of the lessee. By this covenant, the lessor asserts that the lessee will not be evicted by a person who successfully claims to be the real owner of the premises with a title that is paramount to the lessor’s.