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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Step Down Lease


Synonyms:rent decrease lease, step lease
Filed Under: financial-banking, real-estate
Tags: banking, lease, realty
 

Definition of step down lease

step down lease
1. A lease that allows for decreases in a rental payment on specified dates.

Related Terms and Acronyms:

  • closed-end lease   The most common type of car lease. The lessee may return the car at the end of the lease term, pay any end-of-lease costs, such as the disposition fee, and the lease agreement is over. In a closed-end lease, the lender assumes the risk of predicting the value of the vehicle (its residual value) at the end of the lease's term. Closed-end lease payments are somewhat higher than open-end lease payments.
  • lease (lse)   A written agreement in which the property owner allows a tenant to use property in exchange for rent, and for a specified period. Or, a written agreement in which a car dealer allows a consumer to use a vehicle in exchange for payments for a specified period.
  • lease extension   The continuation of an existing lease, at the original monthly payment, usually on a month-by-month basis.
  • lease option   A written agreement in which an owner allows an individual to use a property in exchange for rent, and also gives that individual the right to buy the property for a specified price within a specified period
  • lessee   The person who signs a lease.
  • lessor   The person who grants a lease.
  • open-end lease   Sometimes called a finance lease. It usually offers lower payments, but carries a risk for the consumer. Under an open-end lease, the lessee must pay any difference between the residual value of the car as stated in the lease and the fair market value of the car, if lower, at the end of the lease. The lessor pays for the appraisal that sets the value. If the consumer doesn't agree with it, the consumer may pay for a binding, independent appraisal by someone agreed to by both parties.
  • rent   When one party pays another for the use of an asset, service or property.
  • step up lease   A lease providing for increases in rental payment at specified dates.

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