Must Knows

Who is a lessee?

[] A person who legally acquires the right to rent a property from a landlord is known as a lessee.

In rent agreements, one would invariably find the use of ‘lessee’ and ‘lessor’. This is especially true if the rent agreement pertains to commercial and industrial spaces. In this article, we explain the difference between a lessee and a lessor, and their respective rights concerning a lease.

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[] Know all about rent receipt

Property leasing: The premise

Property renting is common in big cities, where a large number of people move for employment purposes. Since the immediate purchase of property may neither be feasible nor possible, most of them opt for rented accommodations. Here, leases come into the picture.

Property renting versus leasing

Read also : What is long-term capital gains tax on property: 5 things you must know

Leasing is a formal procedure that provides legal backing to one person utilising another person’s property for a certain period. Since, in the West all types of renting – residential and commercial – are lease-based, the common terminology for renting a place is ‘leasing’. In India, however, ‘leasing’ denotes renting of commercial spaces, and ‘renting’ is used for residential properties.

However, these are not just two synonymous words defining the same things. From a legal perspective, leasing property is different from renting a property through a leave-and-licence agreement. Lessee and lessor are the two main parties in a lease agreement.

To know the exact difference between the two, read our complete guide on lease versus rent.

[] Know all about tax on rental income

Who is a lessee?

A legal term, ‘lessee’ is used to define a person who uses a building or an area of land on a lease. He is different from a tenant in the sense that a tenant pays rent for the use of a room, building or land to the owner of the property. So, it is the lease that makes all the difference between a tenant and a lessee.

Read also : Holding period of a house and its impact on income tax benefits

A lessee gets the right to use the property of the landlord in exchange for monthly rent and a security deposit. The rights and responsibilities of lessees are defined in state laws on rental property.

[] Know about Section 80GG

Who is a lessor?

The landlord of a property, who agrees to provide his property on rent through a lease, is known as the lessor. While he provides a lessee with the right to utilise his property, a lessor continues to enjoy complete ownership. Through a prior notice, he can ask the lessee(s) to leave the property. Again, the role and responsibilities of lessors are clearly stated in state rental laws.

[] All about Model Tenancy Act

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Category: Must Knows

Debora Berti

Università degli Studi di Firenze, IT

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