Capital Lease
Rental in which the lessee obtains major property rights. Although not legally a purchase of property, theoretical substance governs over legal form and requires that the leased property be recorded as an asset on the lessees books. The asset equals present value of the minimum lease payments and the present value of the bargain purchase option. A capital lease exists if any one of the following four criteria is met: (1) the lease transfers ownership of the property to the lessee at the end of the lease term; (2) there is a bargain purchase option; (3) the lease term is 75% or more of the life of the property; and (4) the present value of minimum lease payments equals or exceeds 90% of the fair market value of the property.
Popular Real Estate Terms
Abusive tax shelters are a consequence that resulted from Congress allowing losses of revenue to be used for tax benefits. They are a side-effect of tax deductions that companies are ...
Right to an item belongs to the public at large so anyone can use it. An example is a real estate software program that is publicly available by an electronic bulletin board service. ...
Conversion of a rental apartment house to individual condominium ownership of a portion of the minimum ownership of a portion of the building. Often, the tenant is given an opportunity to ...
Market price pf all the property prior to a condemnation proceeding. ...
Frame surrounding a door or window to block adverse weather. It may be made of wood, metal, or other material. The frame may be fixed or moveable. ...
The abstraction method is a valuation procedure used to determine the land value relative to the total market value of the property. The abstraction approach is most often used when there ...
Unintentional error. An example is a house that the seller wants $1,000,000 for but it is mistyped as $100,000. An error may be unilateral or mutual. Some types of errors are the basis to ...
Latin term meaning let the buyer beware. The buyer purchases at his or her risk, in the absence of fraud. This does not obligate the seller to volunteer information. However, legal statutes ...
A fixed marker or monument, either erected or naturally occurring, which serves as a boundary line for a parcel of land. For example, a stream on the eastern edge of the property serves ...
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