Lease-out with Sales-based Rent Adjustment 

Displaying a Lease-out with Sales-based Rent Adjustment

Use

This type of lease is usually used for retail property. It provides for the payment of a percentage of the tenant’s gross income in excess of a predetermined minimum amount of sales. Although percentage payments may be prorated or paid monthly, payments are usually based on an annual computation. It is also possible to make sales based condition calculations based on units sold rather than on revenue. In this scenario you will display a lease-out which has been preset for sales-based adjustment based on gross revenue and discuss all the relevant settings.

Procedure

  1. Call up the transaction as follows:

Menu Path

Accounting ® Real Estate Management ® Master Data ® Object browser

Transaction Code

FOOBJECTBROWSER

  1. If you already assigned the set LEASE_OUT to the Lease-out worklist in the process on Master data continue with the steps below. However, if you do not find a LEASE_OUT set assigned to this folder you will first need to do this assignment. Place your cursor on Lease-out worklist, choose and choose Add set. Choose the appropriate set and press . The assignment should now be complete.
  1. In the Worklist section of the screen position your cursor on the Lease-out worklist and choose . The set assigned to this worklist will now be visible.
  2. Double-click on set LEASE_OUT: The content of this set is now displayed in the Real estate hierarchy part of the screen.
  3. Double-click on lease-out 0100.1201.002. The detailed lease-out data will appear on the right side of the screen.
  4. Choose .

In the General data file tab you can see that the primary adjustment type for this lease-out has been set to Sales-based rent.
  1. Choose the Conditions file tab.

    2. Here you can see that there are three conditions types assigned to this lease-out. Store basic rent is the monthly rent paid by the tenant. OC Flat rate is the flat rate amount paid for the operational costs. Sls.bsd rent AP 1 is the sales-based rental advanced payments that the tenant agreed to. In other words, the tenant has agreed to pay a percentage of his sales income as part of his rent. Since you do not know what the tenant income is going to be for this year until the end of the year, the tenant has agreed to pay a set amount in an advance payment each month. At the end of the year a settlement will take place.

  2. In the Conditions type text column double-click on any one of the Sls. bsd rent AP 1 condition types.
  3. Double-click on Sales-bas.rent.

    4. Here you can see the detailed information regarding the Sales-based rent calculation. At the top you can see the condition type affected by this calculation. Please note the Unit of measurement field. By selecting unit of measurement it is possible to charge the sales-based rent on a number of goods sold rather than the amount sold. For example, if the tenant sells more than 500,000 cartons of goods you will receive 4% of the income.

    Other information you see here is the Settlement variant, this informs you that you will conduct your settlement on a yearly basis, that you are expecting a sales report annually (Reporting interval field), and the sales grading that you agreed upon.

  4. Choose .
  5. Select the any other date and choose. Please note that the Sales gradings information varies from one year to the other.

    6. On the lower right side of the screen you can also see the last existing sales report that exists.

  6. Choose .
  7. Choose until the overview tree appears.
  8. In the dialog box, choose No.

Creating a Lease-out with Sales-based Rent Adjustment

Use

This type of lease is usually used for retail property. It provides for the payment of a percentage of the tenant’s gross income in excess of a predetermined minimum amount of sales. Although percentage payments may be prorated or paid monthly, payments are usually based on an annual computation. It is also possible to make sales based condition calculations based on units sold rather than on revenue. In this process you will use a rental unit: store which you created in the Master Data section. You will create a lease-out for this rental unit and specify sales-based rent conditions. These condition are to be adjusted based on units sold.

Procedure

  1. Call up the transaction as follows:

Menu Path

Accounting ® Real Estate Management ® Master Data ® Object browser

Transaction Code

FOOBJECTBROWSER

  1. In the Worklist section of the screen position your cursor on the Rental unit worklist and choose . The sets assigned to this worklist will now be visible.
  2. Double-click on set that you created in the Master Data process. The content of your set is now displayed in the Real estate hierarchy part of the screen.
  3. Place your cursor on your rental unit with the usage type Store and choose .
  4. In the menu that appears choose Create lease-out.
  5. Under General data, enter the following data:

Field

Data

Contract type

Commerc. agrmt

Adjustment type

Sales-based rent

Rental start

01/01/2000 [January 1, 2000]

Rental end

[Leave blank]

Term

120

  1. Choose Partners.
  2. Choose .
  3. In the dialog box double-click on role 0600.
  4. Enter US in the Country key field and choose . The system will now check any partners with this role type that are located in the United States.
  5. Double-click on any one of the partners. The system will automatically assign that partner to your lease-out.
  6. Choose Lease-out.
  7. Choose the Conditions file tab.

    8. At the beginning of the contract you agree with the tenant on a advance payment amount for the sales-based portion of the rental payment.

  8. Delete the defaulted conditions by placing your cursor on the condition name in the Condition type text column and choose .
  9. Choose .
  10. Select Sls. bsd rent AP 1, and Sls. bsd rent AP 2.
  11. Choose . A new condition types are added to your list.
  1. Under Conditions items enter the following data:

Condition amount

Data

Sls bsd rent AP 1

2000

Sls bsd rent AP 2

1500

  1. In the Jurisdict. code column enter jurisdiction code PA0011000 for each of the conditions.
  1. In the Condition type text column, double-click on the Sls. bsd rent AP 1 condition type. A Create Lease-out: Sales-based rent dialog box appears. Here you will specify additional information regarding this sales-based lease-out.
  2. Enter the following data:
    3.

    Field

    Data

    Settlement variant

    A003 [1/2 Yearly, 01/01 – 06/30 and 07/01 –12/30]

    Planned sales (Amt)

    500,000 [Amount of sales planned]

    Reporting interval

    1 [Monthly]

  3. Choose .
  4. Scroll down the list and select the unit of measurement BOX and choose .
  5. n the Sales gradings box, enter the following data:

Sales from

Sales up to

Amount/UnitMeas.

[Leave blank]

100,000

.05

100,001

[Leave blank]

.03

  1. Choose . An informational dialog box appears.
  2. Choose .
  3. In the Condition type text column, double-click on the Sls. bsd rent AP 2 condition type.
  4. Enter the following data:

Field

Data

Settlement variant

A003 [1/2 Yearly, 01/01 – 06/30 and 07/01 –12/30]

Planned sales (Amt)

500,000 [Amount of sales planned]

Reporting interval

1 [Monthly]

  1. Choose .
  2. Scroll down the list and select the unit of measurement CAR (carton) and choose .
  3. n the Sales gradings box, enter the following data:

Sales from

Sales up to

Amount/UnitMeas.

[Leave blank]

250,000

.25

250,001

[Leave blank]

.2

  1. Choose .
  2. Choose .

Now you will go back into this lease-out and activate it.

  1. Place the cursor on your rental unit with the usage type Store and choose . Your new lease-out will now appear.
  2. Place the cursor on your lease-out and choose .
  3. In the menu that appears choose Change Lease-Out: Master Data.
  4. Choose . In the dialog box your rental start date of 01/01/2000 has been defaulted.
  5. Choose .
  6. Choose until the overview tree appears.