Lessee: The Person That Rents a Property

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Lessee: The Person That Rents a Property

Definition

A lessee is a person or entity that rents property from a lessor under the terms of a lease agreement. The lease is a legally binding contract that defines each party’s rights and responsibilities for use of the property.

What a lessee does and must follow

  • The lessee (tenant) occupies or uses the leased property and must comply with lease terms and applicable law.
  • Violating lease terms can lead to penalties, including eviction.
  • Leases can cover many types of property, including residential units, commercial spaces, and vehicles.

Common obligations and examples

  • Vehicles: Lessees often must observe mileage limits and perform regular maintenance. Exceeding mileage limits or failing to maintain the vehicle can result in additional fees. Some leases include an option to buy the vehicle at the end of the term.
  • Property use: Lessees must follow restrictions in the lease (e.g., no unauthorized alterations, limits on subletting, noise or use restrictions).

Important: A lessor generally must provide reasonable notice before entering a leased residential unit.

Rights of lessees

  • Right to privacy.
  • Right to a habitable living space (basic utilities, safe conditions).
  • Right to live in premises that comply with local building and health codes.
  • Specific rights and remedies vary by lease and local law.

Rights and responsibilities of lessors

  • Rights: screen prospective tenants, approve occupants, and use security deposits to repair tenant-caused damage.
  • Responsibilities: maintain the property to meet health and safety standards, make necessary repairs, return the proper amount of the security deposit when the lease ends, and provide advance notice before entering a tenant’s unit.

Commercial vs. residential leases

  • Commercial lessees may obtain broader rights to alter or customize a space for business use (e.g., signage, repainting, equipment installation). Commercial leases often specify whether the space must be restored to its original condition at lease end.
  • Residential lessees are more likely to face restrictions on permanent alterations and are generally protected by tenant habitability and privacy laws.

Key takeaways

  • A lessee rents property from a lessor and is legally bound by the lease.
  • Lease terms determine permitted use, restrictions, and financial obligations (e.g., fees for excess use or damage).
  • Both lessees and lessors have enforceable rights and duties; specifics depend on the lease and local regulations.