First Principles of Business Law

2.3. Private leases of land

2.3.1. Alternatives to purchasing land

Recall the facts of the case study.  As an alternative to purchasing land and becoming the owner of it, Albert is considering leasing a suitable property. The property he is interested in is available for lease for a period of five years at a rental of $2,000 per calendar month.

Albert wants to know what the essential difference is between purchasing and leasing land and buildings. Consider the following statements and choose the one that is correct. 

(a) A lease of land is a contract between the owner of property and another person, whereby the owner gives the other person the possession and use of the property for a period of time.

(b) A lease of land is a contract between the owner of property and another person, whereby the owner temporarily transfers ownership of the property to the other person for a period of time.