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
Loan with a significant down payment with the balance being paid in equal periodic payments over a short time period. There is no interest charge. An example is when a seller of real ...
Early American style 1 story house with a steep gable roof covered with shingles. The bedrooms are on the first floor, but the attic is often finished and made into additional bedrooms. ...
Exchange of products or property between individuals in which no cash is paid. ...
percentage relationship of a specific part of property to the whole property. An example is the square footage of one office to the square footage of all offices in an office building. ...
Right to peaceful enjoyment of property while the legal title is held by one person and the property is used by another. ...
Borrower's right to redeem his property by immediately paying off the loan balance and any related costs. ...
Method of constructing a brick, block, or stone wall using mortar in various overlapping patterns. The brick pattern is extremely important in terms of adding strength and stability to the ...
Bond collaterized by real assets. Two kinds of mortgage bond are senior mortgages and junior mortgages. A mortgage bond may have a closed-end provision that prevents the firm from issuing ...
The portion of a structure providing the primary ground support. Foundations have a foundation wall forming a permanent below grade retaining wall. All modern foundations rely on concrete ...
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