{"id":3315,"date":"2020-11-29T19:35:56","date_gmt":"2020-11-29T18:35:56","guid":{"rendered":"https:\/\/wordpress-693453-2291131.cloudwaysapps.com\/?p=3315"},"modified":"2021-05-22T00:27:10","modified_gmt":"2021-05-21T22:27:10","slug":"lessor-vs-lessee","status":"publish","type":"post","link":"https:\/\/www.difference101.com\/lessor-vs-lessee\/","title":{"rendered":"Lessor vs. Lessee: What is the difference between Lessor and Lessee?"},"content":{"rendered":"\n<p>Lessor vs. Lessee: When you are about to enter into a lessee and lessor lease agreement, you must know the basic difference between the roles of the two. A lessor is the owner of an asset whereas a lessee acquires a right to use the asset by paying a certain sum of money periodically.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-white ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-660541d083661\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-660541d083661\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#understanding-the-meanings-of-lessor-and-lessee\" title=\"Understanding the meanings of lessor and lessee\">Understanding the meanings of lessor and lessee<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#what-does-lessor-mean\" title=\"What does Lessor mean?\">What does Lessor mean?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#what-does-lessee-mean\" title=\"What does Lessee mean?\">What does Lessee mean?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#what-are-the-advantages-of-lessor-and-lessee\" title=\"What are the advantages of Lessor and Lessee?\">What are the advantages of Lessor and Lessee?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#advantages-to-lessor\" title=\"Advantages to Lessor\">Advantages to Lessor<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#advantages-to-lessee\" title=\"Advantages to Lessee\">Advantages to Lessee<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#what-are-the-disadvantages-to-lessor-and-lessee\" title=\"What are the disadvantages to Lessor and Lessee?\">What are the disadvantages to Lessor and Lessee?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#disadvantages-to-lessor\" title=\"Disadvantages to Lessor\">Disadvantages to Lessor<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#disadvantages-to-lessee\" title=\"Disadvantages to Lessee\">Disadvantages to Lessee<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#what-is-the-difference-between-lessor-and-lessee\" title=\"What is the difference between lessor and lessee?\">What is the difference between lessor and lessee?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#what-are-the-similarities-between-a-lessor-and-a-lessee\" title=\"What are the similarities between a lessor and a lessee?\">What are the similarities between a lessor and a lessee?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#what-is-a-person-who-leases-called\" title=\"What is a person who leases called?\">What is a person who leases called?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#how-do-i-become-a-landlord-with-no-money\" title=\"How do I become a landlord with no money?&nbsp;\">How do I become a landlord with no money?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#what-is-a-consumer-lease\" title=\"What is a consumer lease?&nbsp;\">What is a consumer lease?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#what-is-a-finance-lease-agreement\" title=\"What is a finance lease agreement?&nbsp;\">What is a finance lease agreement?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#which-role-is-suitable-for-you\" title=\"Which role is suitable for you?\">Which role is suitable for you?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#comparison-chart\" title=\"Comparison Chart\">Comparison Chart<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.difference101.com\/lessor-vs-lessee\/#comparison-video\" title=\"Comparison Video\">Comparison Video<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"understanding-the-meanings-of-lessor-and-lessee\"><\/span>Understanding the meanings of lessor and lessee<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To understand the meaning of these terms, let us get into the lessor and lessee definition in detail here:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what-does-lessor-mean\"><\/span>What does Lessor mean?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A lessor can be defined as the property owner who enters into a lease agreement with a lessee to grant him the legal right of using the property for a particular period. He periodically receives a predefined amount as compensation for giving access to his property.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what-does-lessee-mean\"><\/span>What does Lessee mean?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A lessee is a person who acquires the right to use an asset for a particular period and agrees to pay a certain amount in return that is defined in the lessor and lessee contract.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what-are-the-advantages-of-lessor-and-lessee\"><\/span>What are the advantages of Lessor and Lessee?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"advantages-to-lessor\"><\/span>Advantages to Lessor<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul><li>The ownership right of the property lies with the lessor securing him in the case of default.<\/li><li>He enjoys tax benefits by leasing out an asset with a high depreciation rate.<\/li><li>He earns a fixed income in the form of interest paid by the lessee.<\/li><li>He is given priority in payment in case the lessee becomes bankrupt.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"advantages-to-lessee\"><\/span>Advantages to Lessee<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul><li>The lessee gets control of an asset with only a little initial investment.<\/li><li>He receives tax benefits on the lease installments paid.<\/li><li>A lease is a flexible option for the lessee as the contract can be terminated if he doesn\u2019t require the asset anymore.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what-are-the-disadvantages-to-lessor-and-lessee\"><\/span>What are the disadvantages to Lessor and Lessee?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"disadvantages-to-lessor\"><\/span>Disadvantages to Lessor<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul><li>A lease agreement usually requires the lessor to block his funds in an asset for the long-term.<\/li><li>He can only receive the fixed rental mentioned in the agreement, even if the value of his asset increases considerably.<\/li><li>He doesn\u2019t have the right to use his assets.&nbsp;<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"disadvantages-to-lessee\"><\/span>Disadvantages to Lessee<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul><li>The lessee doesn\u2019t have the right of ownership over the asset.<\/li><li>The cost of damage must be borne by the lessee that occurs during the lessor and lessee agreement period.<\/li><li>The lessee is prohibited from making any structural changes on the property or asset without taking prior permission from the lessor.&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what-is-the-difference-between-lessor-and-lessee\"><\/span>What is the difference between lessor and lessee?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There is a clear difference between lessor and lessee that can be comprehended well by examining the following table of differences:<\/p>\n\n\n\n<figure class=\"wp-block-table alignfull\"><table><thead><tr><th>Basis<\/th><th>Lessor<\/th><th>Lessee<\/th><\/tr><\/thead><tbody><tr><td>Ownership&nbsp;<\/td><td>He holds all the ownership rights of the asset.<\/td><td>He doesn\u2019t have any ownership over the leased asset.<\/td><\/tr><tr><td>Lease rentals<\/td><td>He is entitled to receive the lease rentals from the lessee.<\/td><td>He is entitled to pay the lease rentals to the lessor.<\/td><\/tr><tr><td>Legal right<\/td><td>He has the legal right to the leased asset.<\/td><td>He doesn\u2019t have any legal right over the leased asset.<\/td><\/tr><tr><td>Bankruptcy<\/td><td>As the lessor is liable to receive a fixed amount from the lessee, he gets priority in payment if the lessee gets bankrupt.<\/td><td>Since the lessee is not bound to receive any payments from the lessor, he is not considered for payment if the lessor gets bankrupt.<\/td><\/tr><tr><td>Use of asset<\/td><td>He has no right to use the asset as he is receiving fixed rental to forego that right.<\/td><td>He carries all the right to use the leased asset within the restrictions mentioned in the agreement.<\/td><\/tr><tr><td>Damages<\/td><td>Since he is not using the asset, the cost of damages will not be borne by him.<\/td><td>He is responsible for repairing any damages done to the lessor\u2019s asset.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what-are-the-similarities-between-a-lessor-and-a-lessee\"><\/span>What are the similarities between a lessor and a lessee?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Both lessor and lessee agree to the terms of the lease agreement.<\/li><li>The lessor and lessee have rights on the same asset, with the lessor having the ownership rights and the lessee having the right to use.<\/li><li>Both of these parties enjoy some benefits from the agreement they enter into.<\/li><li>They are bound by the lease agreement for the same number of years.<\/li><li>Both lessor and lessee have legal status in the eyes of the law due to the lease agreement they enter into.<\/li><li>They have to honor the clauses of the lease agreement without any alterations.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what-is-a-person-who-leases-called\"><\/span>What is a person who leases called?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A person who leases the property is often addressed as a lessee, and he is liable to pay a certain amount to the owner who is defined in the lease contract.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"how-do-i-become-a-landlord-with-no-money\"><\/span>How do I become a landlord with no money?&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To become a landlord with no money, one can utilize the power of a lease agreement. As a lessee, you won\u2019t be required to invest in the property you want to rent out but will get all the operating control for using it freely. This arrangement allows you to cover your lease rent from the rental income you receive. Therefore, you can become a landlord without investing any money from your pocket.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what-is-a-consumer-lease\"><\/span>What is a consumer lease?&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The consumer lease can be defined as an agreement between two parties for the use of a personal asset, like a laptop, for a specific period. The property can be either used for personal, family, or household purposes. Consumer lease does not cater to agricultural, business, or commercial use.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what-is-a-finance-lease-agreement\"><\/span>What is a finance lease agreement?&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A finance lease is an agreement drawn between two parties where the lessor is a financial company and the legal owner of the asset. The lessee, in such an agreement, is entitled to certain monetary benefits arising due to a change in the valuation of the asset under a lease.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"which-role-is-suitable-for-you\"><\/span>Which role is suitable for you?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In this ever-changing financial world where lessee and lessor accounting standards are changing rapidly, it is essential to demarcate the roles of lessee and lessor. If you have surplus funds at your disposal, become a lessor. But if you necessitate an asset, become a lessee.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"comparison-chart\"><\/span>Comparison Chart<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"639\" height=\"1024\" src=\"https:\/\/www.difference101.com\/wp-content\/uploads\/2020\/11\/lessor-vs-lessee-comparison-chart-639x1024.jpg\" alt=\"Lessor vs. Lessee: Let\u2019s discuss their key differences, similarities, pros &amp; cons, define which is better and which role to choose, and finally, answer some frequently asked questions (FAQ)\" class=\"wp-image-3323\" srcset=\"https:\/\/www.difference101.com\/wp-content\/uploads\/2020\/11\/lessor-vs-lessee-comparison-chart-639x1024.jpg 639w, https:\/\/www.difference101.com\/wp-content\/uploads\/2020\/11\/lessor-vs-lessee-comparison-chart-187x300.jpg 187w, https:\/\/www.difference101.com\/wp-content\/uploads\/2020\/11\/lessor-vs-lessee-comparison-chart-768x1231.jpg 768w, https:\/\/www.difference101.com\/wp-content\/uploads\/2020\/11\/lessor-vs-lessee-comparison-chart-958x1536.jpg 958w, https:\/\/www.difference101.com\/wp-content\/uploads\/2020\/11\/lessor-vs-lessee-comparison-chart-1277x2048.jpg 1277w, https:\/\/www.difference101.com\/wp-content\/uploads\/2020\/11\/lessor-vs-lessee-comparison-chart-788x1263.jpg 788w, https:\/\/www.difference101.com\/wp-content\/uploads\/2020\/11\/lessor-vs-lessee-comparison-chart.jpg 1201w\" sizes=\"(max-width: 639px) 100vw, 639px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"comparison-video\"><\/span>Comparison Video<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-embed-youtube aligncenter wp-block-embed is-type-video is-provider-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"IAS 17 - 7 (A) - Lessee vs Lessor\" width=\"840\" height=\"473\" src=\"https:\/\/www.youtube.com\/embed\/oJGIRINcx48?feature=oembed&#038;enablejsapi=1&#038;origin=https:\/\/www.difference101.com\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" allowfullscreen><\/iframe>\n<\/div><figcaption>IAS 17 &#8211; 7 (A) &#8211; Lessee vs Lessor<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Lessor vs. Lessee: Let\u2019s discuss their key differences, similarities, pros &amp; cons, define which is better and which role to choose, and finally, answer some frequently asked questions (FAQ)<\/p>\n","protected":false},"author":2,"featured_media":3322,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_gspb_post_css":"","footnotes":""},"categories":[164],"tags":[831,548,547],"offerexpiration":[],"lang":"en","translations":{"en":3315,"fr":6036},"pll_sync_post":[],"_links":{"self":[{"href":"https:\/\/www.difference101.com\/wp-json\/wp\/v2\/posts\/3315"}],"collection":[{"href":"https:\/\/www.difference101.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.difference101.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.difference101.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.difference101.com\/wp-json\/wp\/v2\/comments?post=3315"}],"version-history":[{"count":0,"href":"https:\/\/www.difference101.com\/wp-json\/wp\/v2\/posts\/3315\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.difference101.com\/wp-json\/wp\/v2\/media\/3322"}],"wp:attachment":[{"href":"https:\/\/www.difference101.com\/wp-json\/wp\/v2\/media?parent=3315"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.difference101.com\/wp-json\/wp\/v2\/categories?post=3315"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.difference101.com\/wp-json\/wp\/v2\/tags?post=3315"},{"taxonomy":"offerexpiration","embeddable":true,"href":"https:\/\/www.difference101.com\/wp-json\/wp\/v2\/offerexpiration?post=3315"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}