DEFINITION of 'Lessee'

The person who rents land or property from a lessor. The lessee is also known as the "tenant", and must uphold specific obligations as defined in the lease agreement and by law. The lease is a legally binding document, and if the lessee violates its terms, he or she could be evicted.


The lessee's rights include the right to privacy, the right to basic standards of habitability such as water, electricity and heat and the right to live in a space that complies with local building codes.

The lessor's rights include the right to screen potential tenants, the right to know and approve of who is occupying the leased unit and the right to use part or all of the tenant's security deposit to repair any damage caused to the property by the lessee. The lessor's responsibilities include complying with health and safety codes, making necessary repairs, returning a fair amount of the tenant's security deposit when the lease is terminated and providing advance notice to the tenant if it will be necessary to enter the unit.

  1. Transumer

    A consumer who values experience over ownership. Transumers are ...
  2. Key Money

    A payment made to a building owner, manager or landlord by a ...
  3. Month-To-Month Tenancy

    A type of rental agreement. Month-to-month tenancy is based upon ...
  4. Graduated Lease

    A type of long-term, typically for commercial property, lease ...
  5. Lease

    A legal document outlining the terms under which one party agrees ...
  6. Investment Real Estate

    Real estate that generates income or is otherwise intended for ...
Related Articles
  1. Home & Auto

    The Most Expensive Neighborhoods in Manhattan

    Understand why Manhattan has some of the priciest residential real estate in the world. Learn about the top four most expensive neighborhoods in Manhattan.
  2. Home & Auto

    Tips For The Prospective Landlord

    Investing in rental property can generate serious income, but there's more to it than collecting rent.
  3. Taxes

    Tax Deductions For Rental Property Owners

    Besides creating ongoing income and capital appreciation, real estate provides deductions that can reduce the income tax on your profits.
  4. Home & Auto

    Simple Ways To Invest In Real Estate

    Owning property isn't always easy, but there are plenty of perks. Find out how to buy in.
  5. Retirement

    Are You Ready to Rent?

    If you think it's time to test your wings and leave your parents' nest, read on.
  6. Home & Auto

    4 Ways To Value A Real Estate Rental Property

    Real estate rentals can be a profitable alternative to the buy-and-sell approach if investors know how to make accurate valuations.
  7. Economics

    Who is a Lessor?

    A lessor is the owner of an asset that is leased.
  8. Economics

    How Does a Modified Gross Lease Work?

    A modified gross lease is a rental agreement where, in addition to their rent, tenants pay a share of other costs associated with the property.
  9. Credit & Loans

    How Does a Lease Work?

    A lease is an agreement between two parties where the lessor owns property that it allows the lessee to use pursuant to terms of the agreement.
  10. Economics

    What is a Leasehold Improvement?

    A leasehold improvement is an alteration made to a rented space that customizes the space for the tenant.
  1. Does renters insurance cover storage units?

    An all-perils renters insurance policy provides coverage for the contents of storage units. Most policies limit the amount ... Read Full Answer >>
  2. Does renters insurance cover mold?

    An all-perils renters insurance policy typically provides a low set amount of coverage for damage caused by mold as long ... Read Full Answer >>
  3. Does renters insurance cover dog bites?

    A renters insurance policy typically provides liability coverage, up to policy limits, for dog bites unless the coverage ... Read Full Answer >>
  4. Does renters insurance cover theft?

    An all-perils renters insurance policy provides worldwide theft coverage for personal property after a claim exceeds the ... Read Full Answer >>
  5. Does renters insurance cover moving?

    An all-perils renters insurance policy covers damage to items resulting from a covered peril during a move. Limitations and ... Read Full Answer >>
  6. How much renters insurance do you need?

    You should have enough renters insurance coverage to replace lost or damaged items with new ones. On average, renters have ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  2. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  3. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  4. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  5. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  6. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
Trading Center