Contingent Rent

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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 ?
Contingent rents (ASC 840-10-25-5) are not currently treated as MLPs; as a result, a contract that has a considerable variable component as well as a fixed amount is not likely to meet the 90% test, and the lease will probably be considered an operating lease in its entirety.
Potential indicators of disguised MLPs could include below-market fixed rents or contingent rents that seem nearly certain to occur.
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.
Estimates of the lease term, including renewals and contingent rents must be made not only at inception of the lease, but at every reporting date in order to determine the appropriate measure of the right of use asset and lease liability.
Capitalized lease values will include base rent, residual payments, obligated renewals and contingent rents.
In the original proposal, contingent rents would be included based upon a probability-weighted assessment," Hauser said.
Contingent rents are rental payments based on the percentage of the retailer's sales.