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Sale Lease Back Agreement for the United States

Sale Lease Back Agreement Template for United States

A Sale Leaseback Agreement is a complex financial arrangement under U.S. law where an entity sells an asset to a buyer and simultaneously enters into a lease agreement to continue using the asset. This document governs both the sale transaction and the subsequent lease relationship, detailing purchase price, lease terms, maintenance responsibilities, and other crucial terms. It must comply with federal tax regulations, state property laws, and accounting standards while protecting both parties' interests.

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What is a Sale Lease Back Agreement?

The Sale Lease Back Agreement is a strategic financial instrument commonly used in the United States when organizations seek to unlock capital from their fixed assets while maintaining operational use of those assets. This document type combines elements of both a purchase agreement and a lease agreement, requiring careful attention to U.S. federal and state regulations, particularly regarding tax implications and property law. The agreement typically includes detailed provisions about the sale price, lease terms, maintenance obligations, insurance requirements, and potential repurchase options. It's particularly valuable for companies looking to improve their balance sheet while retaining control of essential assets.

What sections should be included in a Sale Lease Back Agreement?

1. Parties: Identification of seller-lessee and buyer-lessor, including full legal names and addresses

2. Background: Context of the transaction, property details, and purpose of the sale-leaseback arrangement

3. Definitions: Key terms used throughout the agreement including Property, Closing Date, Lease Term, Base Rent, etc.

4. Sale Terms: Purchase price, payment terms, closing conditions, and transfer of title provisions

5. Lease Terms: Rent amount, duration, payment schedule, and general terms of the leaseback arrangement

6. Representations and Warranties: Statements of fact by both parties regarding property condition, authority to enter agreement, and compliance with laws

7. Maintenance and Operations: Responsibilities for property maintenance, repairs, and operational obligations

8. Insurance and Taxes: Requirements for property insurance, liability coverage, and allocation of tax responsibilities

9. Default and Remedies: Events of default, cure periods, and available remedies for both parties

What sections are optional to include in a Sale Lease Back Agreement?

1. Purchase Option: Terms for potential repurchase by seller-lessee, including price determination and exercise periods

2. Environmental Matters: Environmental compliance requirements, responsibilities, and indemnifications

3. Subletting Rights: Terms and conditions for subletting the property, including approval requirements

4. Property Improvements: Rights and obligations regarding alterations, improvements, and additions to the property

What schedules should be included in a Sale Lease Back Agreement?

1. Schedule A - Property Description: Detailed legal description of the property, including all improvements and fixtures

2. Schedule B - Rent Schedule: Detailed payment schedule including base rent amounts, payment dates, and any escalation provisions

3. Schedule C - Condition Report: Documentation of property condition at closing, including photographs and inspection reports

4. Schedule D - Operating Expense Schedule: Breakdown of operating expenses and allocation of responsibilities between parties

5. Schedule E - Insurance Requirements: Detailed insurance coverage requirements, including types and minimum amounts

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Genie AI

Document Type

Sale Agreement

Cost

Free to use
Clauses






























Industries

Internal Revenue Code �� 467: Federal regulations governing rental agreements and their tax treatment in sale-leaseback transactions

Internal Revenue Code �� 1031: Federal tax regulations regarding like-kind exchanges and their implications for sale-leaseback structures

Uniform Commercial Code: Particularly Article 2 (Sales) and Article 9 (Secured Transactions) governing commercial transactions and security interests

SEC Regulations: Securities and Exchange Commission regulations applicable when the transaction involves public companies

State Property Laws: State-specific regulations governing real property transactions and ownership rights

State Landlord-Tenant Laws: State-specific regulations governing the relationship between landlords and tenants in commercial contexts

State Commercial Leasing Regulations: State-specific rules and requirements for commercial lease agreements

State Tax Laws: State-specific tax implications and requirements for sale-leaseback transactions

GAAP Standards: Generally Accepted Accounting Principles governing the accounting treatment of sale-leaseback transactions

FASB ASC 842: Financial Accounting Standards Board guidelines specifically addressing lease accounting standards

Environmental Regulations: Federal and state environmental protection requirements affecting property transactions and use

Zoning Laws: Local ordinances governing property use and development restrictions

Americans with Disabilities Act: Federal requirements for accessibility in commercial properties

Building Codes: Local and state safety and construction requirements for commercial properties

Bankruptcy Code: Federal regulations governing the treatment of sale-leaseback arrangements in bankruptcy, including true lease versus secured financing distinctions

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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