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Cancellation Option: The option to terminate, either partially or entirely, a leasehold interest prior to the stated expiration date. In some cancellations, the lease requires the terminating party to pay a fee for the right to cancel.
Cap: The maximum amount which is required to be paid by a tenant for a charge which, in the calculation of such charge, includes a component which is outside of the tenant’s control. As an example, caps may be applied to expense recoveries, CPI adjustments and porter’s wage adjustments. Caps may be expressed as an absolute dollar amount, an amount per square foot or a percentage increase.
Cash Rent: In an agricultural lease, the amount of money given as rent to the landowner at the outset of the lease, as opposed to sharecropping.
Casualty: The complete or partial destruction of property as the result of a sudden or unexpected event, such as a flood, fire, storm, etc. Leases typically include casualty clauses which identify the rights of the landlord and tenant in the event of a casualty. These rights are often times based upon whether the casualty event causes either partial or complete destruction, and include rights to terminate, rent reduction/abatement and time to repair.
Certificate of Insurance: A document provided by an insurance company which indicates that a landlord or tenant’s insurance policy is in effect and the levels of coverage contained within the policy. Leases often require the tenant and/or the landlord to provide such a certificate to the other party on an annual basis as evidence that the coverage required pursuant to the lease has been obtained and is in effect.
Civil Rights Act of 1866: An act that prohibits racial discrimination in the sale and rental of housing.
Commencement Date: The date upon which the landlord and tenant’s rights and obligations pursuant to a lease begin.
Common Area: That portion of a property which is available for use by all tenants over which the landlord retains control and liability.
Common Area Maintenance (CAM): The operating expenses incurred by a landlord to maintain the common areas. CAM charges, as they are typically called, may be recovered from tenants on a pro-rata basis and/or included in base rent via the addition of an add-on factor to the square footage of the leased premises.
Community Association Management: Provides a team of property managers, accounting staff, office staff, and property consultants to manage property.
Complaint: The legal written notice that begins a civil lawsuit. It gives the person who is charged with doing wrong (the defendant) all the important facts that will be part of the case against him/her.
Concession: Item(s) of economic benefit granted from a landlord to a tenant to induce the tenant to enter into a lease transaction. Typical concessions include rent abatements/free rent, moving allowances, lease buyouts, above standard tenant improvement allowances and space plan/drawing allowances.
Confession of Judgment: The landlord may ask the tenant to sign a lease with a confession of judgment clause. If a tenant signs a lease with this clause, the tenant agrees to let the landlord get a court order against the tenant without giving the tenant notice and a chance for a hearing to present the tenant’s side of the story. The court order could say that the tenant owes the landlord money, or that the tenant must move out of the house or apartment. Confession of judgment clauses may also be found in other kinds of contracts, such as retail sales contracts and loan contracts. This procedure may not be enforceable in the courts. If you receive a notice that a judgment has been entered against you, see an attorney immediately.
Construction Eviction: Any disturbance by the landlord of the tenant’s possession of leased premises, thereby then, rendered unsuitable for occupancy (the purpose for which they were leased). In such a case, the tenant is not liable for further payment of rent.
Continuous Operations Clause: A clause in a retail tenant’s lease which obligates the tenant to remain open for business throughout the term of its lease. This is not to be confused with a business hours clause, which specifies the hours during which a tenant is required to remain open for business. A continuous operation clause helps to avoid a situation where a tenant closes its store but continues to pay rent, potentially resulting in no percentage rent and lower traffic and sales for other tenants.
Contraction Option: The option of a tenant or landlord to reduce the amount of space leased by such tenant. A contraction option often defines the premises subject to reduction, the notification and effective dates of contraction, the impact on rent and any contraction fee required to be paid by the party exercising the option. An auto-contraction option is a form of contraction option whereby the size of the premises is reduced automatically on the effective date without any notification requirement.
Co-Tenancy: A clause in a retail tenant’s lease which provides remedies to a tenant in the event that another tenant, typically an anchor or major tenant, ceases its operations at the property.
Counterclaim: If one person (the plaintiff) brings a suit against another (the defendant), and the persons being sued (the defendant) has some claim or charge to make against the first (the plaintiff), that charge or claim against the person bringing the suit is called a counterclaim. For example, if a landlord sues a tenant for two months’ back rent, the following are counterclaims the tenant can bring: 1. Tenant counterclaims for $200.00 for the value of furnace repairs he/she had to make when the lease said it was the landlord’s responsibility to keep the furnace repaired. 2. Tenant counterclaims for $50.00 for the decreased value of his/her apartment because the heat did not work and the roof leaked, ruining the tenant’s rug. 3. Tenant counterclaims for damages suffered by his/her family when the landlord locked them out of their apartment and damaged some furniture when it was set out in the rain.