Legal Definitions - lessor's interest

Definition: The lessor's interest refers to the present value of the future income that a lessor will receive under a lease, plus the present value of the property after the lease expires. It is the value of the lessor's stake in a leased property.

Example: Let's say that a landlord owns a commercial property and leases it to a tenant for a period of 10 years. The landlord's interest in the property would be the present value of the rent payments that the tenant will make over the next 10 years, plus the present value of the property after the lease expires. This value represents the landlord's investment in the property and the income they expect to receive from it.

Another example: A homeowner leases their property to a tenant for a period of 5 years. The homeowner's interest in the property would be the present value of the rent payments that the tenant will make over the next 5 years, plus the present value of the property after the lease expires. This value represents the homeowner's investment in the property and the income they expect to receive from it.

The examples illustrate how the lessor's interest is calculated based on the expected future income from a leased property. It is an important factor to consider when leasing a property, as it determines the value of the lessor's investment and potential return on investment.