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What is an executed lease in simple terms?
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What Is An Executed Lease
An executed lease is essentially a lease agreement signed by all the parties.
A lease agreement is generally executed between a landlord or property owner and a tenant or borrower.
For example, in real estate, the landlord is the person or entity renting a property whereas the tenant is the person borrowing the property.
To better understand the meaning of an executed lease, let’s break down the meaning of “executed” and “lease”.
In contracts and business, when you say that a contract is executed, it means that the contract is signed by all parties.
In the context of a lease agreement, you can say that the lease is executed when the landlord and the tenant have signed it.
Another way of saying “executed lease” is to say “signed lease”.
A lease is a type of contractual arrangement between a property owner and a person who pays to use the asset.
The property owner can be called the landlord, owner, or lessor.
The person using the asset can be called a borrower, tenant, or lessee.
A lease can cover the use of many different types of properties, like apartments, homes, office spaces, vehicles, equipment, or any other asset.
Executed Lease Definition
How do you define an executed lease?
An executed lease can be defined as a contract between a lessor and a lessee where the lessor agrees to let the lessee use a designated property for a certain period of time and subject to certain conditions in exchange for a fee.
Let’s look at the components of the definition of an executed lease.
The first aspect is the “lessor”.
The lessor is the person or entity who owns a certain asset (for example, an office building).
Then, you have a “lessee”.
A lessee is a person or entity who is willing to pay the lessor to use the lessor’s asset.
The lease is an agreement between the lessor and the lessee where the lessor allows the lessee to use a designated property subject to the terms of the lease agreement.
The executed lease is when the lessor and the lessee have both signed the lease agreement formalizing their contractual relationship.
How To Execute A Lease
Executing a lease is an important step.
The steps can vary slightly depending on the complexity of the lease you are signing.
Here are the steps you need to take to execute a standard lease:
- Read the terms and conditions of the lease
- Make sure that it specifically describes the leased property
- Make sure that the rent or fees are clearly called out
- Make sure that all parties to the lease sign the agreement
- Make sure that all the pages, schedules, and exhibits, are initialed at the bottom
- Make sure the lease agreement is properly dated
If you are not sure about something, you should consult a qualified lease attorney to help you navigate the agreement.
Executed Lease FAQs
Let’s look at a few frequently asked questions related to executed leases.
When Is The Lease Legally Binding
Some may wonder at what point does a lease become legally binding?
A lease is legally binding on the parties when it has been fully signed.
In other words, an executed lease is legally binding.
What Happens When The Lease Execution Is Incomplete
A common mistake that may haunt the parties to a contract one day is to fail to execute their lease agreement in full.
When the lease is not executed, it can become legally challenging to enforce its terms.
The party looking to use the incomplete lease must prove the authenticity of the lease agreement, otherwise, the court will disregard the document.
If you want to make sure that the terms and conditions of your lease are legally binding, it’s crucial that you make sure that all parties sign the lease.
As an extra precaution, you can have all the pages of the lease, including exhibits, initialed by the parties at the bottom.
So there you have it folks!
In essence, an “executed lease” is a legally binding agreement between a landlord or lessor and a tenant or lessee where the property owner lets the borrower use a designated property for a fee.
What’s notable with an executed lease is that it has been fully signed by the signing parties and the terms of the lease are binding on the parties.
If you’re looking to execute a lease or have already executed a lease and need legal advice, be sure to consult an attorney.
Now that you know what is the meaning of an executed lease, good luck in your research!
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