Contingent Rent

Contingent Rent

Rent that varies depending on a certain condition. For example, the owner of a property may index its rent to the tenant's monthly income. A contingent rent system may be more beneficial for the lessee than the lessor.
References in periodicals archive ?
For the nine months ended September 30, 2014, leasing revenue increased $142,000 from 2013 due to an increase in contingent rent and scheduled increases in rentals under both short-term leases and long-term land leases.
While there is a general agreement among those surveyed that the renewal options and contingent rents should be included in the measurement, there are concerns about the subjectivity surrounding the estimation of renewal probability, renewal rent and contingent rent, as well as the administrative burden of the required reassessment of those estimates every reporting period.
Under the current standard, contingent rent payments are recognized as rent expense when incurred.
In addition, the company said landlords agreed to settle $29 million in contingent rent obligations on a number of Bailey Bank & Biddle stores.
Barth says that SAB 101 creates industry-specific issues that, if misinterpreted, can cause noncompliance-such as multiple- element contracts, contingent rent, layaway sales, frequent flier miles, extended payment terms, and customer acceptance/installation.
Special rules apply to rental agreements with floating rent, rent based on variable interest rates, or contingent rent.
Management may also levy contingent rent on the rental car companies.
For the three and six months ended June 30, 2014, leasing revenue increased $78,000 and $123,000, respectively, from 2013 due to an increase in contingent rent and scheduled increases in rentals under both short-term leases and long-term land leases.
However, the airport may increase rates at its discretion in the future if necessary, and may also levy contingent rent on the rental car companies.
Given the below-market rent requirement, the company proposed adding a contingent rent amount to compensate the sale-leaseback investor.
If CFC collections were insufficient, the rental car companies would be obligated to pay contingent rent to support a minimum 1.
2) Rent expense represents (i) basic rent expense on a straight-line basis and (ii) contingent rent expense, net of amortization of inducements received from landlords.