What Is A Lessee?
A lessee is an individual who rents an asset or a property from a lessor, who is the owner of the said asset or property.
The legal agreement that binds both parties is the ‘lease’. An asset is provided for the lessee, who is expected to make periodic payments for an agreed time frame to the lessor.
A lessee is also known as a tenant in lease agreements that cover real estate holdings.
The lessee is the second party in a contractual lease agreement who buys the right to use an asset for a specified period and regularly makes payments based on the initial agreement.
The duration of lease periods depends, to a large extent, on the type of asset or property. It is expected that the lessee takes full responsibility for the maintenance and supervision of the asset as is necessary.
In the case of a property, no structural changes to the set-up are expected or will be condoned, and all damages should be adequately repaired before the lease agreement expires as failure to do so means that the lessor can charge the damages bill to the lessee on the grounds of the lease agreement.
However, one of the rights granted to a lessee is that they can remodel the property or space to suit the purpose of use. As such, interior decoration, painting, equipment installation, and so on are not out of place.
In the case of commercial leases, what becomes of the property upon termination of the agreement is expected to be expressly specified.
It could be an extension of the contract or termination, as the case may be.
Suppose an individual is looking to expand their business as he currently runs a coffee shop. In that case, they could choose to get a lease agreement from any adjacent shops, especially if they are not being used regularly.
If the lease agreement is reached, the right to occupancy and use of the shop is granted, and the coffee shop operator can begin to furnish the space and get it ready for use as an extension of the current one.
It is an agreement that is very similar to renting an apartment.« Back to Glossary Index