Legal Definitions - grassum

In Scots law, a grassum refers to an upfront, lump-sum payment made by a tenant to a landlord, either in addition to or in anticipation of regular rent payments. It is essentially an extra payment made at the beginning or during the term of a lease, often to secure the property, obtain more favorable lease terms, or as a premium for a desirable location.

• Imagine a popular coffee shop chain looking to open a new branch in a highly sought-after city center location. To secure the prime retail space over other interested businesses, the coffee shop might offer the landlord a significant one-time grassum payment at the start of the lease, in addition to the agreed-upon monthly rent. This upfront payment helps ensure they get the desired spot and demonstrates their commitment to the landlord.

• Consider a tenant who wants to lease a residential property for a long term, say ten years. To negotiate a slightly lower monthly rent over the entire duration of the lease, the tenant might agree to pay a substantial grassum to the landlord at the lease's commencement. This lump sum compensates the landlord upfront for the reduced monthly income they will receive over the long term, effectively being an anticipation of future rent.

• A manufacturing company has a factory lease nearing its end. The landlord, knowing the company wants to continue operating from that location due to its established infrastructure, might demand a grassum as a condition for renewing the lease for another five years. This payment would be in addition to the new monthly rent agreed upon for the extended term, acting as a premium for the continued occupancy of a valuable industrial site.