‘Lessor’ vs ‘Lessee’: What's the Difference Between the Two?

By Carly Forsaith, updated on December 27, 2022

Have you spotted the words ‘lessor’ vs ‘lessee’ and wondered what they both mean and what the difference is between them? This article will explain it all.

In short, a ‘lessor’ is someone who hires out their asset, and a ‘lessee’ is the person who pays a fee to use it.

Difference Between ‘Lessor’ vs ‘Lessee’

The one thing that connects a lessor and a lessee is a lease. A lease is a contract between each party to agree to rent the lessor’s assets. It’s also a verb that means “to rent out.”

Indeed, two parties are required to draw up a lease. Those two parties are the ‘lessor’ vs ‘lessee.’ Each party can be either an individual or an organization.

These two words are not very common in speech - you’re more likely to use or see them in contracts. In everyday language, you might see the word ‘owner’ or ‘landlord’ or ‘landlord’ in place of ‘lessor’ and the word ‘tenant’ in place of ‘lessee.’

Many other words use the same -or and -ee template. In fact, it’s a common way to convert verbs into nouns that differentiate a giver and a receiver. Here are some examples of these kinds of words:

  • Trainer and trainee
  • Vendor and vendee
  • Trustor and trustee

You can lease out or lease many things, such as a car, house, shop, or even equipment. You could also rent intangible items like a website domain or computer software.

There should always be a contract in place to determine the amount of time and money the asset is being leased for.

When to Use ‘Lessee’

The lessee rents the space from the lessor for a specified period and pays rent periodically or in one go, but usually monthly.

You should use the word ‘lessee’ when referring to the person or organization paying money in exchange for using a space or resource. Here are some examples of the word ‘lessee’ used in a sentence:

As per the contract, the lessee is responsible for any damage caused by them.

The lessee must pay a deposit and a month’s rent in advance before they can move in.

I have found a regular lessee for my parking space.

When to Use ‘Lessor’

The ‘lessor’ is the person who owns the item or space and lets it out to the lessee. As a lessor, you can obtain a return on investment by letting someone use your asset in exchange for money.

‘Lessor’ is to be confused with the homonym ‘lesser,’ a comparative adjective.

Use the word ‘lessor’ when referring to the person or organization paying a sum of money to rent out the resource. Here are some examples of the term ‘lessor’ used in a sentence:

The lessor must sign the contract with a witness present before they can receive the deposit.

The lessor can decide on the amount they’d like to receive from a lessee, but we recommend it be in line with market value.

I’m renting the equipment from a lessor.

Concluding Thoughts on ‘Lessor’ vs ‘Lessee’

Hopefully, this has helped clarify the meaning of each word, and you will go forth feeling confident about which one to use in which context. Remember, though, that there are other words that are much more commonly used in everyday speech and that knowing the distinction between ‘lessor’ and ‘lessee’ will mostly come in handy when reading contracts.

Head to our blog to learn to master even more confusing English words and impress others with your writing.

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Written By:
Carly Forsaith
Carly Forsaith is one of the lead freelance writers for WritingTips.org. Carly is a copywriter who has been writing about the English language for over 3 years. Before that, she was a teacher in Thailand, helping people learn English as a second language. She is a total grammar nerd and spends her time spotting language errors on signs and on the internet.

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