LEASE: Define the term "improvements"

Guys,

If a contract of lease says: "Lessor keeps the improvements introduced on the property"

What does that mean?

The subject property is a commercial space inside a building.

thanks

Also: what are "improvements"?

b_9904 wrote:Guys,

If a contract of lease says: "Lessor keeps the improvements introduced on the property"

What does that mean?

The subject property is a commercial space inside a building.

thanks

This means that during the expiration of the term of the lease contract, any improvements on the leased property introduced by the lessee shall automatically belong to the lessor.

Section 3(k) of the Real Property Tax Code defines improvement as follows:

(k) Improvements is a valuable addition made to property or an amelioration in its condition, amounting to more than mere repairs or replacement of waste, costing labor or capital and intended to enhance its value, beauty or utility or to adopt it for new or further purposes.

The term has also been interpreted as "artificial alterations of the physical condition of the ground that are reasonably permanent in character."

Following this definition, the improvements in a commercial space shall include those that are permanent in character in such a way that it cannot be separated from the building without breaking the material or deterioration of the object. An example of this is are the shelves where the stocks are displayed as long as they are not detachable. Tables, chairs, cash register and other movable equipments are not considered improvements

^thanks, actually I'm also looking up cases regarding that matter.

To all:

So anyone got another definition?

if IM not mistaken, the case quoted by pretty law is BENGUET CORPORATION vs CENTRAL BOARD OF ASSESSMENT APPEALS G.R. No. 106041 January 29, 1993

pls see also the other cases quoted in the above-mentioned decision which discusses the meaning of improvements ( in taxation)

The said equipment and machinery, as appurtenances to the gas station building or shed owned by Caltex (as to which it is subject to realty tax) and which fixtures are necessary to the operation of the gas station, for without them the gas station would be useless and which have been attached or affixed permanently to the gas station site or embedded therein, are taxable improvements and machinery within the meaning of the Assessment Law and the Real Property Tax Code. (Caltex [Phil.] Inc. v. CBAA, 114 SCRA 296).

We hold that while the two storage tanks are not embedded in the land, they may, nevertheless, be considered as improvements on the land, enhancing its utility and rendering it useful to the oil industry. It is undeniable that the two tanks have been installed with some degree of permanence as receptacles for the considerable quantities of oil needed by MERALCO for its operations. (Manila Electric Co. v. CBAA, 114 SCRA 273).

The oil tanks are structures within the statute, that they are designed and used by the owner as permanent improvement of the free hold, and that for such reasons they were properly assessed by the respondent taxing district as improvements. (Standard Oil Co. of New Jersey v. Atlantic City, 15 A 2d. 271)

^hahahaha... using tax laws and cases to define a term to be used in the context of lease.

thanks.

any others?

b_9904 wrote:Guys,

If a contract of lease says: "Lessor keeps the improvements introduced on the property"

What does that mean?

The subject property is a commercial space inside a building.

thanks

The Lease Agreement appears to have been shabbily crafted as it embodies practically everything that the lessee introduces on the leased premises. And I mean, anything that adds to the value of the leased premises whether movable or immovable.

My thinking though is that the parties intend the cover only the immovable fixtures or those that cannot be removed without destroying the property. It wouldn't make sense otherwise, would it?

Meaning of "Improvement" ( under US laws and jurisprudence )

The term "improvement" is not defined by the Act. Where a term "is not defined by the statute, . . . we must assume that the General Assembly intended that th[e] phrase be given its usual and ordinary meaning." Enright v. City of Colorado Springs, 716 P.2d 148, 149 (Colo. App. 1985) (construing the term "improvement" in a statute of limitations); see also Anderson v. M. W. Kellogg Co., 766 P.2d 637, 640 (Colo. 1988) (construing the same term in a statute of repose). Where, as here, the material facts are undisputed, "the question whether a particular item is an improvement to real property is a question of law." Stanske v. Wazee Elec. Co., 690 P.2d 1291, 1293 (Colo. App. 1984) (Stanske I), aff’d, 722 P.2d 402 (Colo. 1986) (Stanske I).

An improvement to real property is commonly understood as "[a]n addition to real property, whether permanent or not; esp[ecially] one that increases its value or utility or that enhances its appearance." Black’s Law Dictionary 773 (8th ed. 2004). In other contexts, the supreme court has held that in determining the meaning of the term "improvement," the court’s primary focus must be the "nature of the activity involved." Anderson, 766 P.2d at 640-41 (quoting Stanske I, 722 P.2d at 406-07).

Thus, a component that is an essential and integral part of a larger system may be an improvement. See Two Denver Highlands Ltd. P’ship v. Dillingham Constr. N.A., Inc., 932 P.2d 827, 830 (Colo. App. 1996) (concrete used to build parking garage "was an essential and predominant part" of the garage and therefore was an improvement to real property); Embree v. Am. Cont’l Corp., 684 P.2d 951, 952 (Colo. App. 1984) (grading to lot was an improvement to real property because it "is essential and integral to the construction and completion of a house"). This is so even if the item could be removed from the property. Enright, 716 P.2d at 150 (glass vestibule attached by bolts to an entry to an airport terminal was an improvement because "the vestibule was a permanent fixture to the terminal itself," even though the vestibule could, theoretically, be unbolted and removed); Stanske I, 690 P.2d at 1293 (indicator light which was part of auger start switch, which in turn was an integral component of electrical system on grain elevator, was improvement even though switch "could probably be removed from the wall").

sheriff maraming salamat po!!!

fbsensei:

salamat din po