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Leases as19
Why are Executory Costs ( maintenance charges, taxes etc) not included in Calculating Minimum Lease Payments from LESSOR's view ??
Replies (4)
can you explain with an example?
Executory costs are excluded because the obligation to meet such costs falls on the lessor. These are based on the Contractual lease agreements which could have in built clauses and demarcation of responsibilities.
For example - the property taxes on a building owned by lessor which is given on lease falls on the head of the lessor, hence it is excluded.
Does the LESSEE have to reimburse the LESSOR for those expenses?
It depends on the terms and conditions specified in the lease agreement.
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