An essential element of a lease is that the
A) lessor conveys less than his or her total interest in the property.
B) lessee provides a sinking fund equal to one year's lease payments.
C) property that is the subject of the lease agreement must be held for sale by the lessor prior to the drafting of the lease agreement.
D) term of the lease is substantially equal to the economic life of the leased property.

Question

Quizplus · Accepted Answer

An essential element of a lease is that the lessor (property owner) conveys less than his or her total interest in the property to the lessee (tenant). The lessee has the right to use and occupy the property for a specified period of time in exchange for regular payments to the lessor. The lessor retains ownership of the property but grants temporary possession and use to the lessee. This is the fundamental concept of a lease agreement.

An Essential Element of a Lease Is That the