What Is a Lessor?

A lessor is essentially someone who grants a lease to someone else. As such, a lessor is the owner of an asset that is leased under an agreement to a lessee. The lessee makes a one-time payment or a series of periodic payments to the lessor in return for the use of the asset. For example, a landlord is a l💫essor, and a tenant is a lessee.

Understanding Lessors

A lessor can b🦩e either an individual or a legal entity.

The lease agreement that they enter into with the lessee is binding. It spells out the rights and obligations of both parties. In addition to the use of the property, the lessor may grant special privileges to the lessee, such as early termination of the lease or renewal on unchanged terms, solely at their discretion.

Types of Leases and Lessors

Leases are usually associated with real estate—a rented residence or office. However, almost any sort of asset can be leased. It can be tangible property such as a home, office, car, or computer, or intangible property, like a 澳洲幸运5官方开奖结果体彩网:trademark or brand name. The lessor in each instance is the owner ꧅of the ꦰasset.

For example, in the case of 澳洲幸运5官方开奖结果体彩网:real estate or a car, the lessor is the property owner or automobile dealer, respectively. In the case of a trademark or brand name, the lessor is the company that owns it and has conferred the right to use the trademark or brand name to a 澳洲幸运5官方开奖结果体彩网:franchisee. When used in connection with the motor carrier industry, a lessor refers to the owner of a commercial vehicl🐈e who contracts with the entity that holds operating authority for the use of the vehicle.

Some lessors can also grant a "澳洲幸运5官方开奖结果体彩网:rent-to-own" lease, whereby some or all of the payments made by the lessee will eventually be converted from lease payments to a 澳洲幸运5官方开奖结果体彩网:down payment on the eventual purchase of the leased item. This type of arrangement usually occurs in a commercial context—when leasing large industrial equipment, for example. But it is a💫lso common in a consumer context with automobiles, and even with residential real estate.

Special Considerations

The most common type of lease is for homes or apartments. Because housing is a matter of public policy, many jurisdictions have created governing bodies that regulate and oversee the legal relationships and acceptable terms of leases between lessors and lessees in this field.

For example, in the state of New York, the New York State Division of Housing and Community Renewal is responsible for administering rent regulation across the state. This responsibility includes both rent control and rent stabilization.ꦗ

The Bottom Line

For a lessor, the main advantage of entering into a lease agreement is that they retain ownership of the property while generating a return on their invested capital.ꦑ For the lessee, periodic payments may be easier to finance than the total purcꦕhase price of the property. The lessee may also not want the responsibility of owning the asset.