Creation of Master Lease with Child Lease Details
Summary:
How to Create Master Lease with Child Lease Details:
Examples Lessee
leases office space from Lessor with original terms as follows:
Size of office space leased: 5,000m2
Lease term: 5 years from 1 January 2021 to 31 December 2025 with no extension or termination options Lease payments: CHF100,000 payable annually in arrears IBR: 5% p.a.
Lessee has a December year-end.
Amending the Lease on 1st Jan 2023 as follow
The original 5,000m2represents five floors of space of equal size.
Each floor constitutes a separate lease component.
Modification: Lessee and Lessor agree on 1 January 2023 to terminate the lease of one floor starting from 1 January 2024.
The annual lease payment remains at CHF100,000 for 2023 for all five floors and is proportionately reduced to CHF80,000 for 20x4 and 20x5 for the remaining four floors.