There are basically four types of leases.

• Building Lease
• Occupational Lease
• Sub Lease
• Lease for life

Building Lease:

This type of leases are most common in which open plot of land is given on lease by lessor to the Lessee for the construction of the building. In these type of leases, rental income from building is received by lessee out of which he pays ground rent for the land to lessor.

Occupational Lease:

 This lease is for use of land and building together which belongs to lessor. The lease period is normally short 3 years, 5 years or 10 years. There is a clause for rent review after 2 or 3 years period and there is a clause for renewable lease for further periods.

Sub Lease:

In this type of lease, Head Lessor leases land to Head Lessee for a fixed lease rent for a fixed period. Head Lessee is given right to sub lease as and when Head Lessee sub leases the land to sub-lessee for enhanced lease rental but for shorter duration than the head lease period. If main lease is for 99 years, sublease is for 98 years.

Lease for Life:

Under this type of lease, period of lease is fixed as the remaining life span of the Lessee. The lease period will mature on the date of death of the Lessee. This type of lease is not common in India