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 ?
Bondholders are further insulated by protective features such as subordination of transfer payments, contingent rent provisions, healthy cash-funded reserves, and continued remittal of CFCs to the trustee in the event of project lease termination.
A 2005 letter from the SEC Chief Accountant emphasizes that contingent rent amounts should be disclosed and that the basis for these rents should be disclosed with "specificity, not generality" (http://bit.ly/2iBggZk).
If the increase or decrease in rent is wholly attributable to a contingent rent provision, or a single rent holiday for a period of three months or less at the beginning of the lease term, or the duration of the rent holiday is reasonable and does not exceed the lesser of 24 months or 10% of the lease term.
The support will cover requested assistance in the design, implementation (including contingent rent, purchase and installation of materials, equipment, software ...), analysis and the return of investigations.
These lease agreements included base rent of USD 500 per acre and contingent rent of 50% of the operating profit of the leased property as defined in the lease agreements.
(3) any contingent rent that accrues during the taxable year.
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.
If a loss is incurred on the sale, in most cases the tenant would reimburse the SPE for the entire loss, using a contingent rent payment (a residual value guaranty).
A rental agreement qualifies for the less-than-$250,000 de minimis exception if, as of the agreement date,(8) it is reasonably expected that the sum of the aggregate rental payments under the lease and the aggregate value of all other consideration to be received for the use of property (including contingent rent) will not exceed $250,000.(9) For purposes of this rule, all rental agreements that are part of the same transaction or a series of related transactions involving the same lessee (or any related person) and the same lessor (or any related person) are treated as a single rental agreement.(10)
The CONRAC also benefits from strong features such as contingent rent provisions and continued remittal of CFCs to the trustee in the event of project lease termination.