4 Flashcards
What is a lease contract?
A contract between the holder of property rights and the consumer of at least some of those rights for a specified period. The sale of the use of space for a predetermined amount of time. Giving passesion but restricting redevelopment unless its a ground lease
What are lessor and leassee
A lessor is the owner of the property or master tenant sub letting space to a subtenant
A leassee is a tenant
Components of a lease
- Name of tenants and landlord
- Specified time period of lease
3.amount and periods between payments - Signatures of both parities
S. Description of leased property - Written consent by owner to transfer possession faces land load to tencent
What is a gross lease
Landland pay all operating expenses and provide a large range service at no cost to the tenant
What is net lease and met lease on multistory buildings
Net lease is when the tenant has bull or some responsibility of operating expenses
The other is when they have to pay net rent and expense reimbursement to the land land
What is a hybrid lease?
It contains elements - of different lease types where the tenant and landland share expenses
Expense stops?
The tenant pays for expenses above a specified annual level and the landlord. Pay for them before that level thus creating an incentive to keep prices low
Why are rent changes important
- They reflect changes in the market between demand and supply
- Gross rent protects the landlord from
Indexation clauses
They tie rent to a price index
Percentage went shopping center leases
Rent = base rent plus percentage of sales revenue above prespecified level
Rental concessions
Used by landlords to induce tenants to sign lease agreements done by improvements or rent free periods
Operating Expenses what are they?
Fixed and dependent
Regularly occurring expense items associated with current operation of the property
Could be fixed, i.e. independent of occupancy levels
▪ Could be dependent on occupancy levels and hence variable
