NEWS.LEASE -The world of leasing is constantly evolving, and there is always something new happening that can affect both lessors and lessees. Here are some of the latest lease news updates you need to know:
1. COVID-19’s impact on leasing
The pandemic has significantly affected many industries, and leasing is no exception. With the global economic downturn, businesses are struggling to pay their rent and meet their lease obligations. Many landlords have had to offer rent relief to their tenants or negotiate new lease terms.
At the same time, there has been a surge in demand for certain types of leases, such as short-term leases for medical facilities and warehouses to store essential goods. The pandemic has highlighted the importance of flexibility in leases, and many businesses are now looking for more flexible lease terms.
2. Changes to lease accounting standards
In 2019, the Financial Accounting Standards Board (FASB) issued new lease accounting standards that require companies to report all leases on their balance sheets. This is a significant change that affects both lessors and lessees, as it requires them to provide more detailed information about their leases.
The new standards also require companies to differentiate between operating leases and finance leases, with finance leases being treated as assets and liabilities on the balance sheet. This change has made it more important for companies to carefully evaluate their lease agreements and determine whether they meet the criteria for finance leases.
3. The rise of electric vehicle leasing
As more consumers switch to electric vehicles, there has been a corresponding rise in the demand for electric vehicle leases. Leasing an electric vehicle can be an attractive option for consumers who want to try out the technology without committing to purchasing a vehicle outright.
At the same time, more leasing companies are offering electric vehicle leases, which can help to make the technology more accessible to consumers. This trend is expected to continue as more electric vehicles are introduced to the market.
4. Increase in lease defaults
The economic downturn caused by COVID-19 has led to an increase in lease defaults, as businesses struggle to meet their lease obligations. This has put pressure on lessors, who may have to deal with unpaid rent and vacant properties.
To mitigate this risk, some leasing companies are offering lease guarantees or insurance to protect against default. However, these products can be costly and may not be practical for all lessors.
In conclusion, the world of leasing is constantly evolving, and it is important for both lessors and lessees to stay up-to-date with the latest lease news. By understanding these trends and changes, businesses can make informed decisions about their lease agreements and stay ahead of the competition.