Recapture Clause

AAA

DEFINITION of 'Recapture Clause'

A provision usually found in percentage leases, especially in shopping-center leases, giving the landlord the right to terminate the lease - thereby recapturing the premises - in the event the tenant does not maintain a specified minimum amount of business. For example, a poorly performing retail shop in a shopping center can damage the shopping center's image and therefore the bottom line of all tenants and the landlord.

INVESTOPEDIA EXPLAINS 'Recapture Clause'

A recapture clause is intended to protect a landlord by making sure that tenants maintain a certain amount of revenue. The recapture clause allows a means for an underperforming retail store to be removed, opening the space for a more profitable endeavor. A recapture clause also protects a landlord in an instance where the tenant attempts to sub-lease the property for a profit.

RELATED TERMS
  1. Gross Lease

    A type of commercial lease where the landlord pays for the building's ...
  2. Capital Lease

    A lease considered to have the economic characteristics of asset ...
  3. Lease

    A legal document outlining the terms under which one party agrees ...
  4. Operating Lease

    A contract that allows for the use of an asset, but does not ...
  5. Commercial Real Estate

    Property that is used solely for business purposes. Examples ...
  6. Deed Of Surrender

    A legal document that transfers property ownership for a specified ...
Related Articles
  1. Should You Buy Property On Leased Land? ...
    Retirement

    Should You Buy Property On Leased Land? ...

  2. Tips For The Prospective Landlord
    Home & Auto

    Tips For The Prospective Landlord

  3. Tax Deductions For Rental Property Owners
    Taxes

    Tax Deductions For Rental Property Owners

  4. Will filing bankruptcy stop an eviction?
    Credit & Loans

    Will filing bankruptcy stop an eviction?

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center