The OR EE Rule - Who's giving and who's receiving?

When you are preparing for the exam, you will come across words like:

• Grantor – Grantee
• Lessor – Lessee
• Vendor – Vendee
• Optionor – Optionee
• Trustor – Trustee
• Mortgagor – Mortgagee
• Offeror – Offeree

The list goes on. And at first glance, it’s a complicated-looking list. But here’s a secret- it’s not that complicated!

The gist of it is, the “OR” is the giver and the “EE” is the receiver.

Say this to yourself over and over again:

“GrantOR, LessOR, OptionOR, VendOR, MortgagOR makes me the givOR of the propetOR for your pleasOR”

So if you see words like Give, Convey and, Sell, that is an OR.

Now say:

“GrantEE, LessEE, OptionEE, VendEE, MortgagEE gives ME propertEE makes me HapEE”

Now, if you see words like Receive, Purchase or Acquire, you know it is an EE.

I know, I know. It may seem silly, however when you’re taking your exam and a question comes up that you’re not sure about, but you know one party is giving and the other party is receiving something, you will be so excited you remembered this! Let’s sing it together now:

“GrantOR, LessOR, OptionOR, VendOR, MortgagOR makes me the givOR of the propetOR for your pleasOR...

“GrantEE, LessEE, OptionEE, VendEE, MortgagEE gives MEE propertEE and makes me HapEE”

Here are some examples of how the OR-EE rule is applied:

• A vendor sells to a vendee.
• A grantor conveys property to a grantee.
• A lessor leases property to a lessee.

You may see a question that asks "who conveys property?” with one option that says Grantor and another option that says Grantee. Even if you remember nothing about deeds, you know the answer is Grantor because OR is the Convey-OR.

Sometimes people say that a mortgage is an exception to this rule. Don’t listen to those people! With the OR-EE rule, there are no exceptions, you just need to understand a little bit about how a mortgage works.

With mortgages, many people do not understand why the mortgagor is the "OR" when they are the borrower receiving the money. What they are forgetting is that the mortgage isn’t about the money, it’s the pledge to pay the money back and provide collateral for the loan. The root of the word Mortgage literally means “death pledge”. So the mortgagor is the borrower who gives a pledge to the lender, who is the mortgagee who receives that pledge. The mortgage pledges the property as collateral for the loan if the mortgagor fails to pay the mortgagee according to the terms of the loan.  

That’s it for the OR-EE rule. I hope it helps you during your studying and during your exam!