The recapture clause is a provision in a contract or lease agreement that enables one party to reclaim goods or property if specific conditions are not fulfiled. For instance, if a contract stipulates a price for goods but market conditions undergo significant changes, the recapture clause may grant the seller the ability to reclaim the goods or modify the price. In the context of a commercial lease, the recapture clause may empower the landlord to terminate the lease and regain possession of the property if the tenant’s profits fall below a certain threshold.
A recapture clause is a provision in a contract or lease that enables the recovery of goods or property if specific conditions are not met. This clause is commonly utilised when market conditions deviate significantly from what was initially expected in the contract or lease. For instance, in a commercial lease, the landlord may include a provision that entitles them to a percentage of the tenant’s profits above a predetermined rent amount. If the tenant’s profits fall below a certain threshold, the landlord may have the right to terminate the lease and regain possession of the property. Similarly, in a sales contract, if the price of a product significantly decreases after the contract is signed, the seller may include a provision that permits them to reclaim the product and sell it at a higher price. These examples demonstrate how a recapture clause safeguards the interests of all parties involved in a contract or lease. It allows for adjustments to be made in response to changing market conditions, ensuring fairness for both parties.
A recapture clause is a provision in a lease agreement that allows the landlord to regain possession of the leased property before the end of the lease term.
A landlord can exercise a recapture clause when certain conditions specified in the lease agreement are met, such as the tenant’s violation of lease terms or the landlord’s need to use the property for a specific purpose.
No, a landlord cannot exercise a recapture clause without a valid reason specified in the lease agreement. The clause must clearly outline the circumstances under which the landlord can exercise this right.
Yes, a tenant can challenge the exercise of a recapture clause if they believe the landlord is not acting in accordance with the terms of the lease agreement or if they believe the landlord’s reasons for recapture are unjustified.
If a landlord exercises a recapture clause, the tenant is typically required to vacate the premises within a specified period of time. The tenant may also be entitled to compensation for any losses incurred due to the early termination of the lease.
Yes, tenants can negotiate the terms of a recapture clause before signing a lease agreement. It is important for tenants to carefully review and understand the recapture clause to ensure it aligns with their needs and expectations.
Yes, there may be limitations on a landlord’s ability to exercise a recapture clause, depending on local laws and regulations. Some jurisdictions may require landlords to provide a valid reason and sufficient notice before exercising this right.
Yes, a recapture clause can apply to the entire leased property or a specific portion of it, depending on the terms outlined in the lease agreement.
In most cases, a tenant cannot terminate a lease early to avoid the exercise of a recapture clause unless there are specific provisions in the lease agreement allowing for early termination under certain circumstances.
If a recapture clause is deemed unreasonable or unfair, it may be challenged in court. The court will consider various factors, such as the language of the clause, the circumstances surrounding its exercise, and any potential harm caused to the tenant.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 16th April 2024.
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