Question

An essential element of a lease conveyance is that the

a. lessor conveys less than his or her total interest in the property.
b. lessee provides a sinking fund equal to one year's lease payments.
c. property that is the subject of the lease agreement must be held for sale by the lessor prior to the drafting of the lease agreement.
d. term of the lease is substantially equal to the economic life of the leased property.

Answer 1

The essential element of a lease conveyance is that the lessor must convey less than their total interest in the property to the lessee, which allows the lessee to use the property temporarily under specified conditions.

Step-by-step explanation:

An essential element of a lease conveyance is that the lessor conveys less than his or her total interest in the property. This means the lessor (property owner) retains ownership and merely grants the lessee (tenant) temporary rights to the use of the property under specified conditions. The other options—mandatory sinking fund, requirement for the property to be held for sale before leasing, and lease term equal to the economic life of the property—are not typically essential elements of a lease agreement.