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This refers to an Accounting term related to a Fixed Asset being leased by the lessee from the lessor. This asset could be a property like a building or a space in a building. The lessee agrees to pay the lessor money, scheduled payments.
The leasehold contract will hold the terms and conditions set between the lessee and the lessor. The contract could be complex when it comes to commercial properties. This is because contract consists of the Landlord and tenant responsibilities, trust clauses, security deposit and improvement clauses. Commercial property leases are generally available for one to 10 years. Leasehold improvement include the changes a tenant can make to the given space. These changes could be modification of walls, ceilings, lightings, shelving, plumbing etc. The contract decides who can pay for these changes – the tenant, the landlord or a combination of both can choose to make the payment. In some cases the lessor might agree to pay for leasehold improvements so that a new tenant could be enticed.
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