Lessor

Key Takeaways

• A lessor is the property owner who grants possession under a lease and receives rent in return; a residential rental agreement calls the same party the landlord.
• A lessor keeps title during the lease term, subject to the tenant's right of possession, and appraisers call that remaining interest the leased fee.
• In Washington, no deposit may be collected unless the rental agreement is in writing and the tenant is given a signed move-in checklist of the unit's condition (RCW 59.18.260).
• A Washington residential lessor must hold deposit money in a trust account and, within 30 days after the tenancy ends, deliver a full and specific written statement of anything withheld (RCW 59.18.270 and RCW 59.18.280).

What It Means

A lessor is the party who owns property and grants another party, the Lessee, the right to occupy and use it under a lease. In a residential rental the same role is called the landlord. What the lessor hands over is possession, not ownership. Title stays put for the whole term, and the interest the lessor holds while a tenant occupies the property is the Leased Fee. Full possession returns when the lease ends.

A lessor is not always the name on the deed. Washington defines landlord to include a person designated as representative of the owner, such as an agent, a resident manager, or a designated property manager, which is why a management firm can sign a lease and serve notices for the owner. The lessor's side of the bargain is the right to collect rent and enforce the lease terms. Set against that are real duties: deliver possession at the start of the term, maintain the property to whatever standard the governing law sets, and handle the tenant's money the way the statute requires rather than the way that is convenient.

How It Works in Washington

In Washington, a residential lessor's obligations start before the tenant moves in. Chapter 59.18 RCW, the Residential Landlord-Tenant Act, bars collecting any deposit unless the rental agreement is in writing and the lessor gives the tenant a written checklist describing the condition and cleanliness of the unit, signed and dated by both parties (RCW 59.18.260). A lessor who takes a Security Deposit without that checklist is liable to the tenant for the amount of the deposit.

Deposit money must be placed promptly in a Trust Account, and unless the parties agree otherwise in writing the lessor is entitled to the interest that account earns (RCW 59.18.270). Within 30 days after the tenancy ends and the tenant vacates, the lessor owes a full and specific statement of the basis for keeping any part of the deposit, together with the refund due (RCW 59.18.280). Through the tenancy the lessor must keep the premises fit for human habitation, including structural repair, safe and clean common areas, and a reasonable program for pest control (RCW 59.18.060). Commercial leases fall outside chapter 59.18 RCW, so a commercial lessor's duties come from the lease itself and common law. A lessor who pays someone else to do this work is buying a licensed service, because RCW 18.85.011 puts property management services inside the definition of real estate brokerage services.

Example

Dale owns a four-unit building in Tacoma and leases unit 3 to Priya for one year at $1,800 per month. Dale is the lessor and Priya is the lessee. Before Priya pays anything, Dale gives her a written lease and a move-in checklist noting a chipped bathroom tile and worn bedroom carpet, and both of them sign and date it. Priya pays $1,800 in first month's rent plus a $900 refundable deposit, which Dale places in a trust account that same week.

In month eleven the furnace fails. Because this is a multi-unit residential tenancy, Dale cannot shift that repair to Priya by a lease clause; keeping the unit fit for habitation is his duty under chapter 59.18 RCW. At move-out the carpet is no worse than the checklist recorded, so Dale withholds nothing for it, but he does withhold $135 for a broken blind he photographed. Twenty-two days after Priya returns the keys, Dale mails her a written statement of the $135 charge and a refund of $765, which is $900 minus $135, inside the 30-day window.

Common Mistakes and Exam Traps

• Lessor and lessee differ by one syllable and are swapped constantly: the lessor grants possession and collects rent, the lessee receives possession and pays it.
• Signing a lease does not transfer title. Only possession moves, and it returns to the lessor at the end of the term.
• In Washington the lessor keeps the interest earned on a deposit trust account unless the agreement says otherwise, which is the reverse of what many students guess (RCW 59.18.270).
• Owner and landlord are not identical terms. Washington's definition of landlord includes an agent, a resident manager, or a designated property manager acting for the owner (RCW 59.18.030).