Key Money

By
rjonesx
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Definition

Key money is one of several forms of payment made to a landlord. The term has various meanings in different parts of the world. It sometimes means money paid to an existing tenant who assigns a lease to a new tenant where the rent is below market. It sometimes means a bribe to a landlord. In other parts of the world, it is used synonymously with normal security deposits, which are used to cover nonpayment of rent and excessive damage to a rental unit.

Key Money

What is ‘Key Money’

A payment made to a building owner, manager or landlord by a potential tenant in an attempt to secure a desired tenancy. Key money can be considered a type of deposit on a housing unit such as an apartment unit.

Key money also refers to a security deposit paid by a lessor or a lessee for a leased property.

Explaining ‘Key Money’

Key money is paid by a prospective tenant to a property owner or manager in the hopes of securing a rental contract in a particular property. In certain circumstances, key money can be considered a bribe to ensure that a property coming up for rent is secured by the payer of the key money, and as such, the transaction is conducted in an unofficial manner.

Key Money FAQ

What is key money in NYC?

Key money is the point at which you pay a landlord cash as a bribe in order to secure an apartment. Although, occasionally, it was building supervisors or even the occupants themselves who request the key money.

What is key money in Korea?

Key money, or Jeonse (전세), is a leasing structure exceptional to South Korea only. The Jeonse framework involves depositing up to half of a property’s estimation, although, the deposit can also be as high as 60%-80%, with the house owner for the lease tenure. The entire amount is then returned to the house occupant at the expiration of the tenure

What is key money Japan?

Key money in Japan is a compulsory installment by a new occupant to the owner of a property. This cash is viewed as a blessing to the proprietor and isn’t returned after the expiration of the rent.

Is key money an intangible asset?

Key cash speaks to expenditure based spending related to procuring existing operational lease agreements for stores in nations where there is a functioning business sector for key money. For example, routinely distributed exchange costs. And are remembered for subsequent intangible assets. Key money isn’t, but instead, it is yearly tried for impairment

What is the meaning of key money?

Key money is the point at which you pay a landlord cash as a bribe in order to secure an apartment. Although, occasionally, it was building supervisors or even the occupants themselves who request the key money.

What does key money mean in commercial real estate?

Key money is the point at which you pay a landlord cash as a bribe in order to secure an apartment. Although, occasionally, it was building supervisors or even the occupants themselves who request the key money. In some instances, key money may not be illegal for commercial real estate agreements, in as much as it is part of the lease agreement documentation.

Further Reading

  • Evaluating fashion retailers' intellectual capital: key money as a part of customer capital – www.emerald.com [PDF]
  • Selection of performance objectives and key performance indicators in public–private partnership projects to achieve value for money – www.tandfonline.com [PDF]
  • Responses to the financial crisis, Treasury debt, and the impact on short-term money markets – papers.ssrn.com [PDF]
  • The Private Finance Initiative in the UK: A value for money and economic analysis – www.tandfonline.com [PDF]
  • The financial instability hypothesis – papers.ssrn.com [PDF]

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