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Менеджмент C) Prepare a short talk about types of commercial lease.
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B) Write down six questions about the text.

A) In order to get prepared for participation in class discussion, write a summary of the text.

The reasons for national and international leasing

There are many tax-related and non-fiscal reasons for leasing. The main function of a leasing transaction is to provide the lessee with the use of an object, without the need that it pays the cost of its acquisition upfront. Simultaneously, it gives the lessor a steady return on its investment. Additionally, the lessor retains the ownership of the leased object. Accordingly, the legal position of the lessor is safeguarded. For that reason it is faced with less economic unpredictability, which, in turn, will lead to lower interest rates. In many states with emerging capital markets leasing is the only source of financing the acquisition or use of capital goods on reasonable conditions. Particularly, leasing gives major cash flow advantages to new companies that have not been able to built-up a stable and reliable credit history. In addition, leasing provides smaller companies with the opportunity to borrow money, without the requirement of collateral. In general, leasing expenses are lower than the costs of the traditional banking devices. Furthermore, leasing can generate funds up to 100% of the financing needs. The total value of world leasing industry increased more than ten-times over the last twenty-five years. The leasing market expanded most in North America, Europe and Asia.

B. Patrick Honnebier, LL.M.

Expert International Leasing Law

Associate Professor of Law

University of Utrecht

Department of Commercial, Financial and Corporate Law

The Netherlands

Words you may need:

to enhance –збільшувати, посилювати

fleets –парк ( автомобілів і под. )

to entail – викликати ( що-небудь )

in ( with ) regard to – відносно

drafting –складання (законопроекту, документу )

acquisition upfront – придбання авансом, наперед

steady return – стійкий прибуток

unpredictability – непередбачуваність, неможливість прогнозування

requirement –вимога, необхідна умова

collateral –додаткове забезпечення

furthermore –до того ж; крім того; більш того


The type of lease being offered is probably the most important thing to consider first because it determines how you will be charged rent. The terms of commercial real estate leases are defined by the type of commercial lease.

Some commercial leases are straight-forward, but most are not. If you do not know what a Ttriple Net Lease is, or what “Load Factor” means, or how your rent will be calculated (it is rare that you will be charged only for the actual square footage you will occupy), you cannot negotiate better terms. Is the lease “full service” or “percentage based?” The key to negotiating terms of a lease may be contingent on first negotiating the type of lease.

Ask to see a copy of a sample lease. A landlord who refuses to let you have time to look over lease terms before signing is not one to be trusted. Commercial leases can be just a few pages, but are more typically 15-20 or even more pages in length.

If you want a lawyer to look over the lease and the landlord refuse – do not sign the lease!