There are a lot of similar words related to mortgages, renting, and housing that are confusing to many people. You can probably imagine how often words like mortgagor vs mortgagee or grantor vs grantee get mixed up. In this article, we will clarify the often confused lessor vs lessee.
A lessor is the owner of a property or landlord who leases a property or asset to an individual or business. They grant a lease, usually in exchange for a payment such as monthly rent. A tenant occupies the property while the lessor maintains ownership of the property, but gives up their right to occupy or use the asset.
The lessor is typically responsible for repairs on the property while the tenant occupies the residence. If the property is mortgaged and/or taxed, the lessor must make timely payments in order to avoid foreclosure or a tax sale.
The lessee is the person or business who rents an asset or a property. They are often considered a tenant who occupy a property in accordance with a lease agreement. They receive the benefit of occupying a property or using an assets typically in exchange for payment. They do not have ownership in the property or asset, but they do take possession after a lease agreement is signed.
A lease is an agreement between the lessor and lessee, which indicates the terms and conditions of how a property or asset is leased/rented. The lease commonly states things like the monthly payment, the start and end of the lease, and the rules of use such as no pets or the maximum occupancy.