Lease terms

A lease is a right to exclusive possession of land. However, in everyday use it extends to the right to use an asset on specific terms. Such terms usually include the payment of some value, often described as "rent".

A lease is also in substance a finance contract.

This guidance note compares leases and bailment and sets out the key features and clauses of a lease.

See Lease terms.

Common types of asset finance products

Operating leases and finance leases are treated as consumer leases under the National Credit Code. Hire purchase agreements and chattel or goods mortgages are treated as loan agreements which are supported by a security interest.

This guidance note contrasts an operating lease with a finance lease and discusses the four products in terms of Australian accounting standards and the National Credit Code. This guidance note also discusses the introduction of accounting standard IFRS 16/AASB 16 and how it affects finance documents.

See Common types of asset finance products.

Personal Property Securities Act and leasing

Finance leases, hire purchase agreements and chattel mortgages fall within the scope of the definition of “security interest” under the Personal Property Act 2009 (Cth) (PPSA). Operating leases can also fall within the scope of that definition but there will need to be consideration given to the terms of that lease.

This guidance note discusses how the PPSA applies to leases.

See Personal Property Securities Act and leasing.