A lessee is an entity that contracts to make rental payments to a lessor in exchange for the use of an asset. The manner in which a lessee can use a leased asset may be restricted, based on the terms of the lease agreement.
A lessee may have the right to sub-lease assets to a third party, though this arrangement usually means that the original lessee continues to have a payment obligation to the original lessor.
The lessee is referred to as the tenant when real estate is being leased. When the structure of a lease is essentially debt, the lessee may instead be referred to as the debtor in the arrangement.