What is a lessor?

A lessor refers to a person or an entity that grants a lease. When the lease granted is for temporary use of real property, the term most commonly used for “lessor” is “landlord.”

In commercial real estate, the lessor grants use of a commercial space, under a lease agreement. The agreement establishes the lessor’s rights, as well as obligations, regarding the leased property, for the duration of the lease.

In exchange for temporary use of the lessor’s property, the tenant (lessee) makes either a one-time payment or periodic payments. The advantage to the lessor of such investments is that the landlord retains ownership of the real estate asset, while generating a return on the investment.

The lessor is generally required to lease the property free from damage, or disclose any damage to the property, before the lease agreement is completed. Then, depending on the type of lease that is agreed upon, the lessor will more or less be responsible for the upkeep.

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