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.
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.
A financial lease is a leasing arrangement where the lessor's role is mainly limited to financing the property, while the lessee takes on the responsibilities of maintenance, insurance, and taxes, resembling a loan in its structure.
A lease is a contractual agreement in which a lessor grants the lessee the right to use an asset for a specified period in return for specific rental payments. While the lessor retains ownership rights, the lessee gains usage rights.
A lease bonus is an amount paid to a lessor to induce them to execute a mineral lease, entitling the lessee to explore, develop, and produce minerals from the leased area.
A lessor is an individual or entity that grants a lease to another party, allowing them to use an asset for a specified period in exchange for periodic payments. Lessors are commonly involved in real estate, equipment leases, and other forms of property or assets.
A leveraged lease is a lease agreement that involves a third-party lender in addition to the lessor and lessee. This structure is commonly used in financing large capital assets.
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.
An agreement granting the lessee the right to extract and sell minerals from the lessor's property in exchange for royalty payments based on the value of the extracted materials.
Understanding the net investment in a lease involves considering the total amount of funds that a lessor has invested in a leased asset. This includes the cost of the asset, received grants, rental payments, taxation implications, residual values, and various interest payments and receipts.
An open-end lease is a leasing agreement that includes a provision for an additional payment after the leased property is returned to the lessor, to account for any fluctuations in the property's value.
An operating lease is a lease agreement that is not a finance lease, in which the lessor retains significant risks and rewards of ownership.
A reappraisal lease is a type of lease agreement where the rental level is periodically reviewed by independent appraisers to ensure the lease payments reflect the current market value.
A True Lease is a leasing arrangement in which the lessor retains the risks and rewards of ownership, distinguishing it from other lease types like Financial Lease and Synthetic Lease.
