Many leases have rent steps that increase by a fixed percentage every number of years or other periods. EZLease can create the full series of steps based on the initial rent. Any rent steps previously entered for the period specified will be deleted. If you select a period starting after the beginning of the lease or ending before the expiration of the lease, however, the remaining rent steps will be kept.
To create escalating rents, select the Lease menu, Rent Escalation. Be sure to set the correct begin and end date for the lease first.
Enter the date that the base rent step begins. The default is the begin date of the lease.
Enter the date that the final rent escalation step ends. The default is the end date of the lease.
Rent payment period length
Enter the frequency of the rent payments.
Enter how often the rent increases. The frequency cannot be shorter than the payment period length (for instance, if rent is paid quarterly, the increase cannot be monthly).
Enter the net rent (excluding executory costs and nonlease components, as relevant) and executory cost or nonlease components separately, since they may be on different schedules (executory cost may not increase at all, for instance).
Enter the base payment, before any increases.
Enter the percentage or dollar amount by which the rent increases each time it changes. For the executory cost, if you choose a dollar amount, only Exec Cost #1 is incremented; if you choose a percentage, all executory costs increase.
Specify whether the increase is a percentage or a dollar amount.
Check the box if the percentage increase compounds, so that the second increased step is calculated as a percentage higher than the first increased step.
A 20-year lease is 1000 per month (with no executory costs) for the first 5 years, 1100 per month for the next 5 years, then 1200, then 1300. Enter a rent payment period of Monthly, increase every 5 Years, net rent initial amount 1000, increase 100 $ or 10 %, compounded box unchecked.
A 10-year lease is 100 per month net rent, 10 per month executory cost, for the first year. Each year following, the net rent increases by 5% compounded (105, 110.25, 115.76, 121.55, etc.); the executory cost does not change. Enter a rent payment period of Monthly, increase every 1 Years, net rent initial amount 100, increase 5%, compounded box checked; executory cost initial amount 10, increase 0 (%/$ and compounded box don't matter).