How to show an Early Termination with buyout

For Example:

Assume a 60-month lease analysis that has an early buyout option at the end of month 24 with penalty payment equal to 1 month's payment ($6,000).

• If tenant does NOT excercise option to terminate early, the $6000 penalty does NOT apply and analysis should be for entire 60 month period.
• If tenant DOES excercise option to terminate early, the $6000 penalty DOES apply and analysis should be for 24 month period.

Solution:

In the Special Expense/Credit input section

 Put in 6,000 in month 24 (need to put month & year or use the lease month button), and then put in -6,000 in month 25 (month year etc.). That way in the partial term for 24 months you will capture the penalty, but it will net out to 0 over the 60 months.

Next go to the Lease Term input section, select Special Date Options and in the Optional – Partial Term fill in 24. Click the button to show the Partial Term on the report.

After clicking the button, go to the Financial Summary report, at the bottom you will see the cost for the first 24 months.

You can add the Partial Term cost to LseSum too, see Related Topics below.

TIP: Show the years as a calendar year vs. lease year so the annual totals are not distorted. In the graphic below, the lease is shown on a Calendar Year so here the year 3 total shows the Adding in of the cancellation cost, and then the reversal, whereas in the graphic ABOVE, the year 2 total includes the cancellation cost. The difference, in the graphic below, the lease was shown on a Calendar Year basis vs. a Lease Year basis.

Related Topics:

How is LseMod Buy different from LseMod Purchase

How to change from Lease Year to Calendar Year to Fiscal Year

How to show a Partial Term in the financial analysis

Applies To:

	Silver Series		Gold Series		Specialty Programs
ü	LseMod Tenant Rep	ü	LseMod Pro		LseMod Condo
ü	LseMod Industrial		LseMod Purchase		LseMod Commission
ü	LseMod Landlord		LseMod Sale Leaseback		SpacePro
	LseMod Buy
ü	LseMod Sublease
ü	LseMod Retail
ü	LseMod Economic Development