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To be contrasted with a lease contract for a single transaction involving a specific unit of equipment, a Master Lease is essentially a line of credit to draw from over time in order to purchase equipment.
A master lease is a continuing lease arrangement, preferred by customers who anticipate multiple installations over a sustained period of time. This arrangement allows the customer to sign a single agreement and make one agreed payment, instead of several agreements, with several separate payments.
A master lease is a type of lease that gives the lessee the right to control and sublease the property during the lease, while the owner retains the legal title. In this case, a housing authority or service provider would be the lessee, allowing them to sublease the property to its clients.
Traditional master leasing is a third-party leasing strategy in which an agency becomes the primary leaseholder and leases individual units, a subset of units in a single building, or all units in an entire building. The agency then subleases to the secondary tenant.
Benefits of a Master Lease Agreement for the Seller The seller also receives several benefits from a master lease agreement: Income: The seller receives monthly lease payments. Freedom: The seller is no longer involved in managing the property. Easy Closing: The property sale can close quickly and inexpensively.
You receive all profits, i.e., net cash flows after subtracting the regular lease payments and expenses. The buyer receives all tax benefits from the property. You are responsible for managing and maintaining the property, including paying utility bills, annual insurance premiums and property taxes.
A master lease agreement is legal document where you lease an income-producing property as a single tenant-landlord and sublease to two or more tenants to produce income. One common example are shopping malls, which have many stores renting space from one landlord.