A bargain purchase option is a provision in a lease agreement that allows the lessee to purchase the leased asset at the end of the lease term for a price significantly lower than the expected fair market value.
A bargain renewal option in a lease agreement gives the lessee the right to extend the lease term at a rate favorable enough that's considerably below market value.
Base rent refers to the minimum rent due under a lease that may also include a percentage or participation requirement based on sales revenue or other criteria.
A cancellation clause is a contract provision that grants the right to terminate obligations upon the occurrence of specified conditions or events. For example, a cancellation clause in a lease might permit the landlord to break the lease upon the sale of a building.
Committed costs are typically fixed costs that management has a long-term responsibility to pay, such as rent on a long-term lease and depreciation on an asset with an extended life.
Constructive eviction occurs when, through the fault of the landlord, physical conditions of the property render it unfit for the purpose for which it was leased.
An element of rent that varies based on certain conditions, such as sales, usage, interest rates, or inflation indexes, rather than being fixed at the inception of the lease.
In real estate, a formal depiction of the dimensions and location of a property, generally included in deeds, leases, sales contracts, and mortgage contracts for real property.
Eviction refers to the removal of a tenant from rental property by the landlord through legal processes, usually due to the tenant's failure to comply with the lease agreement or maintain rent payments.
Fair Market Rent (FMR) is the estimated amount of money a given property would likely command if it were available for lease in the current open market.
A ground lease involves leasing land, usually on a long-term basis, to allow the lessee to develop property on that land.
A land lease, also known as a ground lease, is an agreement in which a tenant rents land for a specified period of time and has the option to construct buildings or other improvements on it. Unlike typical property leases, in a ground lease, the tenant usually gains control of the land and any developments for the lease term.
A lease with an option to purchase allows the lessee (tenant) the right to buy the property at a predetermined price, under specific conditions. Its treatment may vary depending on whether it closely resembles a financing arrangement.
Leasehold refers to the right acquired under a lease to use land and buildings for a specified period in return for the payment of a specific rental. Understanding leasehold agreements is crucial for both residential and commercial tenants, as it determines the terms and conditions under which they can use the leased property.
Leasehold Improvements are fixtures attached to real estate that are generally acquired or installed by the tenant. Upon expiration of the lease, the tenant can generally remove them, provided such action does not damage the property or conflict with the lease agreement.
A leasehold mortgage is a type of lien placed on the tenant's interest in real estate, which is generally subordinate to other liens on the property.
A long-term lease generally refers to a commercial lease of five years or longer, or a residential lease longer than one year. It involves a contractual agreement between a landlord and tenant for the use of a property for a prolonged period.
Partial eviction occurs when a tenant is deprived of a portion of the property they are leasing, resulting in adjustments to rental agreements.
Protective covenants are conditions written into real estate deeds or leases to protect the property owner's interests by regulating use, controls, and restrictions.
Quiet Enjoyment refers to the right of a tenant or property owner to use and enjoy their premises without significant disruption or interference. It is usually guaranteed by a covenant whether explicitly stated in a lease or implied by law.
Self-help refers to efforts by a landlord to remedy a tenant’s default on the lease without resorting to legal proceedings. This method is highly controversial and generally not supported by legal frameworks in most states.
Surrender is the cancellation of a lease agreement by mutual consent of both the lessor (property owner) and the lessee (tenant), effectively ending their contractual lease obligations.
A lease agreement where the duration is fixed and agreed upon by both parties, running for a specific term such as two months, three years, ten years, and so on.
A Tenant Finish-Out Allowance, also known as a Tenant Improvement Allowance, is a sum of money provided by a landlord to a tenant for the purpose of customizing and improving the leased space to meet the tenant’s needs.
Tenant fixtures refer to fixtures added to leased real estate by lessees, which, by contract or by law, may be removed by the lessee upon expiration of the lease.
Property placed on or annexed to rented real estate by a tenant for the purpose of conducting a trade or business. The law makes provisions for, and leases often expressly permit (or require), the tenant's removal of such fixtures at the end of their tenancy.
