Abatement refers to a reduction in the amount, intensity, or duration of something. In the context of real estate, it typically applies to decreases in taxes, rents, or environmental harm.
Absolute Net Rent is a leasing structure where the tenant is responsible for all property-related expenses, including taxes, insurance, and maintenance, leaving the landlord with no financial obligations related to the property.
Additional Rent refers to the amounts of rent that are due above the minimum or base rent. This covers a variety of potential extra charges that a tenant may be responsible for, depending on the lease agreement.
The base year in real estate is a starting point used to compare financial data, often related to property taxes or operating expenses, to calculate escalations or adjustments in subsequent years.
The term Beginning of the Year (BOY) refers to events that occur at the start of a financial year. In the context of real estate, BOY often includes the due dates for rent payments, financial projections, budget implementations, or financial assessments.
A buyout occurs when the owner of a new building acquires the remaining lease term of a tenant from a different building, thereby freeing the tenant from their old lease obligations and allowing them to negotiate a new lease.
Common Area Maintenance (CAM) charges are fees paid by tenants to landlords for the upkeep of shared spaces such as hallways, restrooms, and parking lots. These charges are typically calculated on a pro-rata basis and are essential for the maintenance and functionality of commercial properties.
Compensatory damages are awarded in legal cases to compensate for actual losses or damages suffered by the injured party, aiming to make them whole again. These damages cover measurable losses, such as medical expenses, lost wages, and repair costs, and do not include punitive or non-economic damages.
In real estate, default refers to the failure to fulfill an obligation or promise, or to perform specified actions as agreed upon in a contract. This term is frequently used in scenarios involving mortgages or leases where the borrower or tenant fails to meet the terms agreed upon.
A Fixed-Price Lease-Purchase Option is a contractual agreement where a tenant has the option to purchase the leased property at a predetermined price after or during the lease term.
A graduated lease is a type of lease agreement that allows for periodic changes in rent at pre-determined intervals, providing a systematic way to adjust rent in accordance with certain agreed-upon conditions.
A 'Hell or High Water' lease is a provision in certain lease agreements that requires the lessee to continue making rent payments despite any circumstances affecting the lessee or the property involved. This assurance often includes a parent company guarantee to the lessor.
A Hold Harmless Clause in a contract is a provision by which one party agrees to protect another party from claims, lawsuits, or any legal liabilities arising from a specific situation or activity.
A Leaseback, often referred to as a Sale-Leaseback, is a financial transaction in which a property owner sells their asset and leases it back from the buyer. This allows the original owner to continue using the property while freeing up liquid capital.
Leasehold improvements refer to any changes or additions made to a rental space by a tenant that are intended to enhance or adapt the space for their particular use. These modifications are typically attached to the property, involve investment in fixtures or installations, and must comply with the terms of the lease agreement.
A long-term lease typically refers to a commercial lease agreement that spans five years or more or a residential lease agreement lasting over one year. Long-term leases offer stability and predictability for both landlords and tenants, coming with distinct advantages and potential drawbacks for each party.
Maturity refers to the due date of a loan, bond, lease, or insurance policy when the principal amount or full sum is to be repaid or the agreement expires. It establishes the timeline over which periodic payments or interest accrues and is eventually repaid.
To alleviate, reduce, or abate a penalty, punishment, or damage in a real estate context. Often involves actions such as mitigating financial obligations or physical damage to property.
A Mobile Home Park is a subdivision of plots designed for the siting of mobile homes. Plots are typically leased to mobile home owners and include utilities, parking space, and access to utility roads. Many parks also offer amenities such as swimming pools and clubhouses.
Overage in leases for retail stores is the additional amount to be paid based on gross sales that exceed a predetermined threshold in addition to the base rent, often seen in percentage leases.
In contract law, performance refers to the completion of duties and obligations specified in the contract. Proper performance by all parties ensures that contractual objectives are met and can prevent disputes.
A Primary Lease is an agreement between a property owner (landlord) and a tenant that may be partially or wholly subleased to another tenant.
Property management encompasses the oversight and operations necessary to maintain real estate properties, including rent collection, maintenance, and financial management.
A purchase option is a contractual right granted to a party (typically a tenant) that gives them the opportunity, but not the obligation, to buy an asset or property at a specified price within a set period.
In real estate, quiet enjoyment is the right of an owner or any person legally entitled to possession to use property without interference. It is fundamental for tenants and property owners, ensuring that they can possess and enjoy their property in peace.
Rent acceleration is a provision in a lease agreement that allows a landlord to demand the entire remaining rent due if the tenant defaults on the lease.
Rent concession refers to a temporary reduction or discount on the rent payable by a tenant to attract or retain tenants in rental properties. These concessions can take various forms, such as free rent periods, reduced rent, or landlord-paid improvements.
Rent escalation refers to a provision in a lease agreement that allows for periodic increases in the rental rate.
The rental rate is the periodic charge per unit for the use of a property. The period may be a month, quarter, or year, and the unit may be a dwelling unit, square foot, or other unit of measurement.
A Request for Proposal (RFP) is a document that announces a project, describes it, and solicits bids from qualified contractors to complete it. RFPs provide a structured process for acquiring services or leased space and are commonly used in various industries such as real estate, construction, IT, and more.
A sale-leaseback allows the owner of a property to sell it and simultaneously lease it back from the buyer, converting from owner to tenant while freeing up capital for other uses.
A security deposit is a cash payment required by a landlord, to be held during the term of a lease to offset damages incurred due to actions of the tenant.
A short form is a concise document, often no more than two pages, that references another, more detailed document. It is usually recorded at the county courthouse to avoid handling a longer, more cumbersome document.
A step-up lease, also known as a graduated lease, involves periodic scheduled increases in rent at predetermined intervals over the lease term, allowing for predictable revenue growth for landlords and manageable rent for tenants.
A stop clause in a lease stipulates the amount of operating expenses above which the tenant must bear the cost. Often, the base amount is the expense for the first full year of operation under the lease.
Tenant Improvements, often abbreviated as TIs, refer to the customized alterations a building owner makes to rental space as part of a lease agreement to configure the space for the tenant's specific needs.
Termination in real estate entails the conclusion of contractual obligations such as leases, loans, or options either by performance or by breach.
