Being a lessor and a lessee, the parties to a lease agreement have some rights and responsibilities. Go through this article for an insight into the subject.
While tenants, landlord, rent, rental agreement, etc., are some of the commonly used words; one may not be that familiar with terms like lessor and lessee. Though the terms tenant and lessee do not mean the same, they are often used interchangeably. Likewise, the words landlord and lessor, rental agreement and lease, etc., are used in the same manner. Though they mean more or less the same, there are some differences when it comes to their usage.
We all know that a landlord is the owner of the property that is rented out to the tenant, through a rental agreement. Likewise, a lessor is the owner of a property who allows the lessee to use it, in return of rent or other types of consideration. In that case, the lessor and lessee are bound by a lease agreement. Terms like rental agreement, tenant, and landlord are commonly used; and terms like lessor and lessee are more formal. Such formal terms are mostly used in legal contexts. However, there are some differences between them.
A rental agreement is usually made for a very short term, whereas a lease agreement is meant for a long term. A tenant can be anybody, who is allowed by the landlord to stay in his property, while a person becomes a lessee, only when he enters into a lease agreement with the lessor, who is the owner of the property. Let us learn something more about the terms, lessor and lessee, and their duties and responsibilities.
According to Black’s Law Dictionary, “A conveyance of lands or tenements to a person for life, for a term of years, at will, in consideration of a return of rent or some other recompense. The person who so conveys such lands or tenements is termed the “lessor,” and the person to whom they are conveyed, the “lessee;” and when the lessor so conveys lands or tenements to a lessee, he is said to lease, demise, or let them.
In simple words, a lessor is the owner of a real property, who rents it to the lessee. The lessee can possess and use the property for a specific time frame, as given in the lease agreement, in exchange of payment of funds. Usually, the leased property is tangible, like a house, a vehicle, or an equipment. However, intangible ones like a computer program, a brand name, or a trademark, can also be leased. Both the lessor and the lessee are bound by the lease agreement that contains the terms and conditions of the lease.
When it comes to lessor vs. lessee, the rights and responsibilities are mainly decided according to the terms and conditions of the lease agreement, and the relevant laws. The parties may go for specific terms and conditions that may vary with the type of lease and their requirements. Given below is a brief overview of the rights and responsibilities of a lessor and lessee, in case of a rental residential property.
- The lessor has to ensure that the property is clean, safe, and habitable, before the lessee occupies the same. He must also comply with the health and safety codes, before handing over the possession. Repair works must also be done beforehand. He must pay property taxes and other charges on time.
- Maintenance and repair works must be done at regular intervals, or as and when required. In case of such repair works, the lessor must inform the lessee about the same, and provide advance notice to the lessee, regarding his entry into the property and the purpose.
- He must not annoy, disturb, or cause discomfort to the lessee unnecessarily. If the lessor fails to fulfill his duties, the lessee may vacate the property, or stop paying the rent. He may also sue the lessor for not complying with the terms and conditions of the lease agreement.
- The lessor has the right to collect the rent on time, and evict the lessee, if the latter fails to make timely payment. In case of non-payment of rent or violation of lease terms, the lessor can hold back the security deposit, in part or in whole.
- The lessee must not use the rental property for illegal purposes. He should not use the property in any manner, other than what is provided in the agreement.
- He must carry out the repair works, or pay for the same, for the damage caused to the property, by himself, his family members or friends.
- He must not prevent entry of the lessor to the property for inspection or repair works, if the latter has informed him earlier, or in case of an emergency.
- He must pay the rent on time. He is bound to take reasonable care of the property and return it to the lessor, once the lease term is over.
- The lessee has the right to enjoy the property and use it as per the terms and conditions provided in the agreement. If not expressly prohibited in the agreement, the lessee can underlet the premises.
This is only a brief explanation about lessee and lessor, and their respective duties and rights. The laws regarding lease agreements may vary from one state to another. So, consult an attorney and understand the clauses, before entering into such agreements.