Who is referred to as a lessor in a leasing agreement?

Who is referred to as a lessor in a leasing agreement?

• A. The party that receives the property
• B. The party that leases the property
• C. The party that conveys property by lease
• D. The party that manages the property

Answer: (C)

In a leasing agreement, the term "lessor" refers specifically to the party that conveys property by lease. This entity is the owner of the asset and is offering it to another party for use over a specified period in exchange for rental payments. The lessor retains ownership rights and assumes certain responsibilities associated with the property, such as maintenance and insurance obligations, depending on the terms of the lease. This understanding is essential in the context of capital planning and forecasting. Accurately identifying the roles of lessor and lessee helps in assessing the financial implications of leasing arrangements, impacting budgeting, cash flow projections, and asset management strategies. The other choices illustrate different roles involved in a leasing agreement but do not define the lessor accurately. The party that receives the property refers to the lessee, while the party that leases the property typically describes the lessee's actions rather than defining the lessor itself. Lastly, the party that manages the property could be an external management company or the lessor, but this does not directly refer to the lessor's definition in the context of the leasing arrangement.

In a leasing agreement, the term "lessor" refers specifically to the party that conveys property by lease. This entity is the owner of the asset and is offering it to another party for use over a specified period in exchange for rental payments. The lessor retains ownership rights and assumes certain responsibilities associated with the property, such as maintenance and insurance obligations, depending on the terms of the lease.

This understanding is essential in the context of capital planning and forecasting. Accurately identifying the roles of lessor and lessee helps in assessing the financial implications of leasing arrangements, impacting budgeting, cash flow projections, and asset management strategies.

The other choices illustrate different roles involved in a leasing agreement but do not define the lessor accurately. The party that receives the property refers to the lessee, while the party that leases the property typically describes the lessee's actions rather than defining the lessor itself. Lastly, the party that manages the property could be an external management company or the lessor, but this does not directly refer to the lessor's definition in the context of the leasing arrangement.