# Lease Abstract: [Property, unit and tenant]

> A short, structured summary of one commercial lease: the parties, the
> premises, the term, the rent and how it changes, the options and their
> notice deadlines, who repairs and pays for what, and the clauses that
> limit what each side can do. Asset managers, property managers,
> lenders, valuers and accountants read the abstract instead of the full
> lease, so every entry cites the clause it comes from. Based on common
> commercial leasing practice; it feeds lease accounting under IFRS 16
> Leases or US GAAP ASC 842 (see `finance/lease-accounting-memo`).
> Replace every `[bracketed]` value and every row marked *Example*. This
> is a documentation format, not legal advice: the signed lease and its
> later deeds govern, and statutory rights depend on the jurisdiction,
> so check them with a qualified professional.

<!--
Guidance: How to use this template
- Abstract from the signed lease and every later document (licences,
  side letters, deeds of variation, rent review memoranda). List them in
  section 1 so a reader knows what was read.
- Cite the clause number for every entry. An abstract without clause
  references cannot be checked and will be distrusted.
- Write what the lease says, not what you think it means. Flag unclear
  wording in section 9 for a lawyer instead of resolving it yourself.
- Put every date that needs action into the critical dates table and
  into the team calendar with a reminder well before the deadline.
- Fictional example: unit U-101 at Quelmont Park Building B, landlord
  Varrowby Property Fund, tenant Fenwyn Print Studio, managed by
  Tessaline Property Management. All names and figures are invented;
  currency USD. The same unit appears in `real-estate/rent-roll-arrears`.
-->

## Document control

| Field | Value |
|---|---|
| Abstract ID | [LA-QPB-U101] |
| Property and unit | [Quelmont Park Building B, unit U-101, first floor] |
| Version | [1.0] |
| Status | [Draft / Checked / Approved] |
| Prepared by | [@name] |
| Checked against the lease by | [@name, ideally a second person or a lawyer] |
| Last updated | YYYY-MM-DD |
| Classification | [Confidential] |

### Revision history

| Version | Date | Author | Change summary |
|---|---|---|---|
| 0.1 | YYYY-MM-DD | [@name] | First abstract from the signed lease |
| 1.0 | YYYY-MM-DD | [@name] | *Example:* Checked; side letter on rent-free period added |

## 1. Documents reviewed

<!-- Guidance: List every document that forms part of the lease, with its date. A rent review memorandum or a licence to alter often changes the numbers. -->

| Ref | Document | Date | Notes |
|---|---|---|---|
| DOC-01 *(Example)* | Lease | 2022-03-18 | Signed counterpart held by the landlord's solicitor |
| DOC-02 *(Example)* | Side letter on rent-free period | 2022-03-18 | Personal to the original tenant |
| DOC-03 *(Example)* | Licence for alterations (mezzanine storage) | 2023-05-02 | Reinstatement required at lease end |
| DOC-04 *(Example)* | Rent deposit deed | 2022-03-18 | Deposit of 52,500 held in a separate account |

## 2. Parties and premises

<!-- Guidance: Use the legal names exactly as written in the lease. Record any guarantor and the extent of the premises, including what is excluded. -->

| Item | Entry | Clause |
|---|---|---|
| Landlord | *Example:* Varrowby Property Fund (acting through its trustee) | Particulars |
| Tenant | *Example:* Fenwyn Print Studio | Particulars |
| Guarantor | *Example:* None | Particulars |
| Premises | *Example:* Unit U-101, first floor, 1,000 m2 net lettable area, internal surfaces only; structure and common parts excluded | 1.1, Schedule 1 |
| Rights granted | *Example:* Use of common parts, 12 car parking spaces, loading bay by booking | Schedule 2 |
| Permitted use | *Example:* Printing studio and ancillary offices | 1.1 |

## 3. Term and statutory status

<!-- Guidance: Record the term exactly. Statutory rights to renew vary by country: for example in England and Wales business tenants may have security of tenure under Part II of the Landlord and Tenant Act 1954 unless validly excluded. Record what the lease and the completion documents say and ask a lawyer to confirm. -->

| Item | Entry | Clause |
|---|---|---|
| Lease date | *Example:* 2022-03-18 | Particulars |
| Term start | *Example:* 2022-04-01 | Particulars |
| Term length | *Example:* 10 years | Particulars |
| Expiry | *Example:* 2032-03-31 | Particulars |
| Statutory renewal rights | [Jurisdiction and status, for example "excluded by agreement, notice and declaration dated YYYY-MM-DD"] | [Clause] |
| Holding over | [What happens if the tenant stays after expiry] | [Clause] |

## 4. Rent and payments

<!-- Guidance: Give the amount, the frequency and the payment day. Record rent-free periods, stepped rents and indexation as dated rows, and say whether amounts exclude sales tax or VAT. -->

| Item | Entry | Clause |
|---|---|---|
| Initial rent | *Example:* 210,000 per year (210 per m2), exclusive of tax | Particulars |
| Payment | *Example:* Monthly in advance on the 1st (17,500 a month) | 3.1 |
| Rent-free period | *Example:* 6 months, 2022-04-01 to 2022-09-30 | DOC-02 |
| Rent review | *Example:* 2027-04-01, open market review, upward only | Schedule 4 |
| Review basis | *Example:* Hypothetical letting of the premises with vacant possession for a term equal to the original term, disregarding tenant's improvements | Schedule 4, para 2 |
| Interest on late payment | *Example:* 4% above the base rate of a named bank, from the due date | 3.4 |
| Service charge | *Example:* Fair proportion of building costs, budgeted at 23.81% (1,000 of 4,200 m2), quarterly on account | Schedule 5 |
| Insurance | *Example:* Landlord insures, tenant reimburses its share of the premium | 6 |
| Deposit | *Example:* 52,500 (3 months' rent), held in a separate account | DOC-04 |

## 5. Options and critical dates

<!-- Guidance: This is the section that loses money when it is wrong. Compute each notice deadline from the clause, state whether "not less than" means the deadline is inclusive, and set reminders. -->

| Event | Date | Notice | Notice deadline | Conditions | Clause | Owner |
|---|---|---|---|---|---|---|
| Rent review date *(Example)* | 2027-04-01 | Either party may start the review | None, review can start late | Upward only | Sch 4 | Asset manager |
| Tenant break *(Example)* | 2027-09-30 | Not less than 6 months' written notice | 2027-03-30 (conservative; ask a lawyer to confirm how the lease counts the period) | No material rent arrears, vacant possession on the break date | 9.1 | Asset manager |
| Lease expiry *(Example)* | 2032-03-31 | [Statutory notices if renewal rights apply] | [Per statute] | Reinstate mezzanine (DOC-03) | 1.1 | Asset manager |

```mermaid
gantt
    title U-101 key dates (Example)
    dateFormat YYYY-MM-DD
    section Term
    Lease term :2022-04-01, 2032-03-31
    Rent-free period :2022-04-01, 2022-09-30
    section Options
    Break notice window :2022-04-01, 2027-03-30
    Rent review :milestone, 2027-04-01, 0d
    Break date :milestone, 2027-09-30, 0d
```

## 6. Obligations

<!-- Guidance: Summarise who does what. For repair, say whether the tenant covers the whole building, its premises only, or the interior only, and whether a schedule of condition limits it. -->

| Topic | Tenant | Landlord | Clause |
|---|---|---|---|
| Repair | *Example:* Keep the interior in good repair, no schedule of condition | Repair structure, roof and common parts, cost recovered through service charge | 5.1, 7.2 |
| Decoration | *Example:* Every 5 years and in the last year | Common parts | 5.3 |
| Alterations | *Example:* Non-structural with consent, not to be unreasonably withheld; no structural alterations | Consider requests | 5.6 |
| Alienation | *Example:* Assignment of the whole with consent; no subletting of part | Consider requests | 5.8 |
| Compliance with law | *Example:* Within the premises | Common parts and structure | 5.10 |
| Yielding up | *Example:* Return in repair, remove alterations if the landlord asks | Inspect and serve schedule of dilapidations | 5.14 |

## 7. Accounting and reporting inputs

<!-- Guidance: Give finance what it needs for the lease accounting memo. Lease term judgements (whether a break or renewal is reasonably certain to be exercised) are made by finance, not by the abstractor. -->

| Input | Entry |
|---|---|
| Commencement date | *Example:* 2022-04-01 |
| Non-cancellable period | *Example:* to 2027-09-30 (first tenant break) |
| Options to note for the lease term judgement | *Example:* Tenant break 2027-09-30 |
| Variable payments | *Example:* Rent review to market, service charge, insurance |
| Incentives | *Example:* 6 months rent-free (105,000) |

## 8. Insurance, environmental and other clauses

<!-- Guidance: Record anything unusual that a buyer, lender or valuer would want to know. -->

| Topic | Entry | Clause |
|---|---|---|
| Rent suspension after damage | *Example:* Rent suspended for up to 3 years if insured damage makes the premises unfit | 6.4 |
| Energy performance | *Example:* Parties share energy data; no minimum rating clause | 8.2 |
| Landlord's right to redevelop | *Example:* None | |
| Exclusivity or restrictions | *Example:* None | |

## 9. Open points for review

<!-- Guidance: Questions only, no conclusions. A lawyer answers them. -->

| ID | Question | Raised by | Answer |
|---|---|---|---|
| LQ-01 *(Example)* | Does "material" arrears in the break condition include a disputed service charge balance? | [@name] | |
| LQ-02 *(Example)* | Does the mezzanine reinstatement duty in DOC-03 also apply if the tenant leaves on the 2027 break date? | [@name] | |

## Standard and licence note

Based on common commercial leasing practice. IFRS 16 Leases (issued
January 2016 by the IASB, effective for periods beginning on or after
1 January 2019) and ASC 842 are named for orientation only; see
`finance/lease-accounting-memo`. The England and Wales example refers to
the Landlord and Tenant Act 1954, Part II. The text is original. Check
the current official texts and a qualified professional. Template
licence: MIT.