Lessor and Lessee

Common uses for leases

There are many reasons why both parties to a lease may want to enter into a formal lease agreement:

• Outlining each party’s responsibilities under the lease, including maintenance of the property and utility payments
• Setting the rent price and payment schedule
• Determining the types and amounts of insurance that each party must carry
• Specifying the conditions under which the parties may terminate the lease and each party’s remedies in the event of a breach of the lease.

Case Examples

• Issues when renting an apartment: In Levine v. 860 W. Tower, Inc., No. 96 CIV. 6124 (LAP), 1999 WL 185270, at *5 (S.D.N.Y. Mar. 31, 1999), the lessee sued the lessor for breach of contract after the lessor attempted to evict them due to a supposed noise complaint. The court found that although the lease included a noise clause, the clause was too broad and ambiguous to be enforceable.
• Insurance: In Carlyle Aviation Mgmt. Ltd. v. Frontier Airlines, Inc., 711 F. Supp. 3d 225, 237 (S.D.N.Y. 2024), the Court determined that the lessee, Carlyle, could not sue the lessor for failing to carry insurance under the lease when the insurance was not required under the lease.
• Leases involving equipment: Leases are not just for real property. They can also apply to the rental of movable equipment, such as trailers or medical equipment. In Virginia Heart Inst., Ltd. v. Nw. Pennsylvania Bank & Tr. Co., 448 F. Supp. 215 (W.D. Pa. 1978), the lessee sued the lessor for failing to carry insurance to protect and replace the medical equipment they leased that led to the death of a family member. The court found that the lessor was not responsible for carrying such insurance, as the equipment was under the lessee’s care and control at the time that it broke.