 Personal Finance PowerPoint Presentation, lease part number one, get ready to get financially fit by practicing personal finance. Most of this information can be found at Investopedia, leaseee by the Investopedia team updated December 12, 2021 so you can go there for more references and resources continuing your research from that point in prior presentations. We've been talking about the decision-making process for larger purchase items, those that are going to impact multiple periods into the future. Remembering that when we're thinking about finance in general, we can usually think about those short-term types of decisions where we can train our gut so we can trust our gut using tinkering, using trial and error, and those long-term decisions where we can't train our gut to trust our gut because the one decision is going to have an impact for multiple periods into the future and therefore we put in place a more formal type of decision-making process. We then talked about the home purchase versus leasing or versus renting and now we're focusing more on the renting side of things as opposed to the home purchase. We'll talk more about the home purchase decision in future presentation. The leasing decision is kind of in the middle. It's not a short-term decision because it's not one you make from day to day. You can't totally train your gut to trust your gut but instead it's somewhere in the middle, at least a month by month, to a year lock-in on the lease. So you want to go through at least a more formal process to decide where you want to be with regards to the lease and possibly at least think about what your more long-term plans will be with regards to your living conditions. When you're going into the rental process then of course you've got the leaseee and you've got the lease that you're going to have to be dealing with which is going to be a form of contract that will lock you in to at least some degrees. So you want to have some ideas of that contract of the contractual agreement and what it is and what you might want to look for within it. So what is a leaseee? A leaseee is a person who rents land or property from a leaser. These two terms can often get confused when you're talking about a rental type of situation meaning when you say the leaseee are you talking about the person who's doing the renting, the rental company, the person doing the renting or are you talking about the person who is renting the place that's going to be paying the rent? When we're talking about the leaseee we're talking about the person that's paying the rent not the leasor. The leasor is going to be the one that is giving the property, the one that's going to be receiving the rent. So, once again, a leaseee is a person who rents land or property from a leaseeer. The leasee is also known as the tenant and must uphold specific obligations as defined in the lease agreement and by law. So, we're considering here, we're in a leasee perspective, we're looking for rental property that we are going to be renting from the leaseeer. So, the leasee is a legally binding document and if the leasee violates its terms, they could be evicted. So, when we think about what's involved within the lease, if we violate the lease, which means, for example, we don't pay, for example, that would be the most clear cut kind of violation, then action could be taken in accordance with the contract that has been put in place, which could of course include possibly the eviction. Understanding the leasee. Leasees who rent a property may be required to follow certain restrictions and guidelines and the use of the property or real estate they are paying to access and use. So, you want to make sure that when you're paying for the access and use that you understand what those restrictions are so that you can make sure that they are going to suit your needs and that you can work within them. So, if the property is a vehicle under a lease, the leasee may need to keep their usage within certain mileage limits. So, we have seen that in the car situation, if you were to lease a car, they might have restrictions in terms of how long or how many miles you can drive the car because usually the lease is in terms of years of time. But clearly, when you talk about something like a car, then the usage is going to have a big impact in terms of the value of the car at the end. So, you could have limitations and you want to know what those limitations are. The leasee could be subject to paying additional fees in the event that the mileage use of the leased vehicle exceeds the agreed upon limits. Leased vehicles must also be maintained by the leasee with regular service and upkeep through the term of the agreement. These conditions must be met because the vehicle will be returned to the auto dealer at the end of the lease of the vehicle would then go to a market as a used car for sale. So, clearly, at the end of the lease, whatever we are leasing, it's going to be returned to the lease or so then it needs to be returned in the condition expected or defined under the terms of the lease. It is possible that a leasee might want to seek full ownership of the vehicle at the end of the lease in such an option is made available. So, at the end of the leasing term, then the question is what are we going to do at that point in time? If it was a vehicle, we might have a purchase decision, we might be able to rent it again, rental type of situation for a place, a home, then we might want to update the lease for another year or possibly go on to another kind of agreement such as a month by month type of agreement. Rights of the leases, a leasee who is a tenant of a commercial or residential property may space different types of restrictions on their use of the space. A commercial leasee could be granted certain rights to remodel the property to better suit the business that will use the space. So, when you have the property, then, of course, the question is what can you do with the property? You don't have as much leeway to do with what's with the property that you would, you would think if you owned the property, there's going to be certain restrictions involved and if you are the type of person that likes to do a lot of personal remodeling, likes to do your own thing in your home and put your own time into remodels and fixing things and so on, then you might feel more restricted on a leasing situation than a purchase situation because, of course, there might be limitations on those types of activities in a lease situation. This can include repainting of walls, adding the signage associated with the company's brand, or installing equipment that will be used during the course of a business. So, if you're talking, you know, about business property, then the question is what can I do with regards to the branding and a sign and so on? If you're talking about residential property, possibly you're doing business in the property as well as your home, question is what can you do with regards to that property on your business as well? You can't you can't treat, you know, you got to be within the guidelines if it's residential or business property. A commercial lease will also specify if the property must be returned to its original state when the tendency ends. So, if you make substantial changes to it, what does it need to look like when the lease is over? You got to change it back to what it was before or not. Rights of the leases, residential leases may be limited to the choices for or are barred from repainting the space they occupy as tenants. So, if you're the type of person that likes to do your own kind of thing and repairs and whatnot, usually if you're renting, those types of things are done by the the rentor and so the question is how much leeway might you have to do those kind of things if you so choose to do those kind of things. They might be allowed to add non-permanent decorations to the property. So, when you're adding decorations, clearly they're going to have an impact on the property. Are they going to be permanent type of things that are going to be added or not? The leases rights include the right to privacy, the right to basic standards of habitability such as water, electricity and heat, the right to live in a space that complies with local building codes, rights of the leasor. So, the leasor remember is the person that is you know renting the property as opposed to the leasee that is using the property. In other words, the leasor is going to be receiving the rent the lease and the leasee is the one that's going to be paying it. The right to screen potential tenants, this is the leasor's rights, the right to know and approve of occupants of the leased unit. So, they get the ability to screen who's going to be using the property and make those types of decisions on who's going to be using their property which would make sense given the fact that they own the property. The right to use part or all of the tenant's security deposit to repair any damage caused to the property by the leasee. So, clearly you got that security deposit type of situation designed as a safeguard in the event that there's damage to the property that the person leasing the property has coverage over it. The leasor's responsibility include complying with health and safety codes, making necessary repairs, returning a fair amount of the tenant's security deposit when the lease is terminated and provided advance notice to the tenant if it will be necessary to enter the unit.