How to Calculate Remaining Lease Term?
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Calculating the remaining lease term of a property involves a straightforward mathematical calculation. Here’s how you can calculate it:
Step 1: Find the Lease Start Date
- First, you need to know the start date of the lease. This information is usually provided in your lease agreement or by your property management company.
Step 2: Determine the Lease Duration
- Check your lease agreement to find out the total duration of the lease. Leases can vary widely in length, typically ranging from 99 years for residential leases to longer terms for commercial properties.
Step 3: Calculate the Remaining Lease Term
- Once you have the lease start date and the lease duration, you can calculate the remaining lease term using this formula:
Remaining Lease Term = Lease Duration – (Current Year – Lease Start Year)
- Here’s a breakdown of the formula:
- “Lease Duration” is the total number of years the lease was initially granted.
- “Current Year” is the current calendar year.
- “Lease Start Year” is the year in which the lease started.
Example of Remaining Lease Calculation:
- Let’s say you have a residential lease that started on January 1, 2000, and it’s a 99-year lease.
- Current Year: 2023
- Lease Start Year: 2000
- Lease Duration: 99 years
- Using the formula:
Remaining Lease Term = 99 – (2023 – 2000) = 99 – 23 = 76 years
So, in this example, the remaining lease term would be 76 years.
Keep in mind that this calculation assumes that there are no lease extensions, reductions, or other factors that may affect the remaining lease term. If there have been any lease extensions or variations, you should consult your lease agreement or a legal expert like a Leasehold valuation surveyor for a more accurate calculation.