Lessee or lessor? Mortgagee or mortgagor? Which is it?
Both help describe rights to real property. Before we start the vocabulary lesson, let’s put some of this in context.
Your home (or any home) may have a mortgage and it may also have someone else living in it generating cash flow. Yet, it is a home.
Commercial Property, be it multi-family apartments, retail, industrial, office, and warehouse, all have one thing in common: the owners bought them to specifically generate a return.
Now some may also be bought as a place for a business owner to set up shop, but the fact remains that the property should generate positive cash flow.
This leads us to the first ‘ee/or.’ The Lessee of a property is the tenant, while the Lessor is the landlord. For example, the Lessee normally has the right to use the property, but not to sell it to another. They also might have the right to have someone else use the space under the original terms of the lease, or sublet.
Let’s now add some confusion to this discussion of ee/or.
Unless you just won the Power Ball, you probably have a mortgage on your home, and/or know how this works. That said, the Mortgagee is simply the lender while the Mortgagor is the borrower.
For simplicity, ‘or’ denotes the owner of the property (the landlord or borrower) and ‘ee’ denotes someone having a legal involvement with the property (the tenant or lender). Clear as mud?
We will revisit these concepts in future articles as we feature those commercial properties that help make a positive Naperville.
