Which lease type involves the lessor providing maintenance services with the cost possibly included in the lease or under a separate maintenance agreement?

Which lease type involves the lessor providing maintenance services with the cost possibly included in the lease or under a separate maintenance agreement?

• A. Bundled Lease
• B. Service Lease
• C. Wet Lease
• D. TRAC lease

Answer: (B)

In a service lease, the lessor takes on maintenance responsibilities for the asset. The maintenance can be included in the lease payments or arranged under a separate maintenance agreement. This setup shifts upkeep risk to the lessor while giving the lessee flexibility on how service costs are structured. It’s different from a bundled lease, where maintenance is typically built into the lease price as a single package, and from other types like TRAC or wet leases, which involve different concepts not centered on maintenance service structure.

In a service lease, the lessor takes on maintenance responsibilities for the asset. The maintenance can be included in the lease payments or arranged under a separate maintenance agreement. This setup shifts upkeep risk to the lessor while giving the lessee flexibility on how service costs are structured. It’s different from a bundled lease, where maintenance is typically built into the lease price as a single package, and from other types like TRAC or wet leases, which involve different concepts not centered on maintenance service structure.