The lessee is used to pay an annual rent to lessor and observe content in lease

The lessee is used to pay an annual rent to lessor

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The lessee is used to pay an annual rent to lessor and observe content in lease. There are different type of lease as follows: - 1) Building lease: - In case of owner of freehold open plot of land let our his land on lease to some person called lessee on agrees amount of premium or ground rent or both combined. The lease holder can erect building up to specified amount in specific period and he maintain the property and reside income through such property. The rent which paid by leaseholder for use of land usually for purpose and privilege of building on another man land called as ground rent. 2) Life lease: - When duration of lease for property is given until death of person this is called as life lease. 3) Occupation lease: - In case of this lease is grant premium or rent or combination of two by owner of property consist of land and building or other structures for occupancy for fixed period to another person. The leaseholder does not have to spend money to construction of building and such lease is generally granted for short term as 7,14,21 year The leaseholder maintain the property according to term and condition or lease. 4) Sub lease: -
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A leaseholder have tender sub lease of his leasehold property to other person subject to term and condition In original lease and allow by local regulations or court of law. In this case original lease holder is named as assignment of lease and sub lease holder called sub lease. 5) Perpetual lease: - When lease of property is given for number of year providing condition that lease in renewable time to time, even for endless time according to desire of lease holder called as perpetual lease. 3.10 Difference between estimation and valuation Estimation Valuation An estimation to calculation of quantities required and expenditure like to incurred in construction work Valuation is process estimating the cost of property based on present condition. An estimate is the probable cost of work and find out by mathematical calculation based on plan drawing and current rate Properties may be immovable properties like land , building, quarries, etc and movable properties like coal, oil, steel, cement and sand etc 3.11 Depreciation: - It loss in value of property due to it use, life, wear, tear, decay, and obsolescence. This is about assessment of physical wear and tear of building or property and it depends upon its original conditions, quality of maintenance and mode of use The value of building or property decrease gradually upto utility period due to depreciation. 3.12 Method of calculations of depreciation: - There have three type of method explain as follows: - a) Straight line method: - This method of property is assuming to lease value by constant amount at every year and fixed amount of original cost is written off every year so, that at end at term when asset is worm our, only scrap value removal.
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Annual depreciation = ( original cost – scrap value) / life in year. b) Constant percentage method / declining balance method: - In this method the property which can assume to lose value annually at constant percentage of it value.
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  • Two '10
  • Depreciation, present fair value of property

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