Lessor: Definition, Types, Vs. Landlord and Lessee

A lessor is a person or company that owns an asset and leases it to another person or company for a specified period of time. The lessor receives rental payments from the lessee in exchange for the use of the asset.

There are two main types of lessors:

• Financial lessors: These lessors are primarily interested in making money from the lease payments. They typically do not have a use for the asset themselves and are not involved in its operation.
• Operating lessors: These lessors are primarily interested in using the asset themselves. They may lease the asset to another company in order to get access to it without having to purchase it outright.

The relationship between a lessor and a lessee is governed by a lease agreement. This agreement specifies the terms of the lease, such as the length of the lease, the rental payments, and the conditions under which the asset can be used.

A lessor is different from a landlord in that a landlord owns the property that they rent to tenants. A lessor, on the other hand, does not own the asset that they lease to a lessee.

A lessor is also different from a lessee in that a lessee is the person or company that uses the asset that is leased to them. A lessor is the person or company that owns the asset and leases it to the lessee.