Definition of Leasor

A Lessor is a lease participant who takes possession of the property and leases it to the lessee for temporary possession. In a leasehold estate, for example, the landlord is the leasor and the tenant is the lessee.

Definition of Lease

A lease is a contract that requires the lessee (user) to pay the lessor (owner) for the use of an asset. Property, buildings, and cars are examples of leased assets. Leasing is also used for industrial or commercial equipment.

A lease agreement is, in general, a contract between two parties, the lessor and the lessee. The lessee acquires the right to use the asset in exchange for regular rental payments from the lessor, who is the legal owner of the asset. The lessee also undertakes to follow certain conditions when using the property or equipment. A person leasing a car, for example, may stipulate that the car will only be used for personal purposes.

A lease in which the asset is tangible property is described by the narrower phrase rental agreement. The user rents the land or items let out or rented out by the owner, according to the language used. Because it might relate to either of these actions, the verb to lease is less precise. A lease for intangible property might include the use of a computer program (akin to a license, but with distinct provisions) or the use of a radio frequency (such as a contract with a cell-phone provider).

Internationally and in some parts of the United States, the phrase rental agreement is also used to indicate a periodic leasing arrangement (most typically a month-to-month lease).

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