18:48
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Simple English definitions for legal terms
no-bonus clause
Read a random definition: criminal libel
A quick definition of no-bonus clause:
A no-bonus clause is a part of a lease agreement that limits the damages a tenant can receive if the government takes over the property. It means that the tenant can only receive compensation for any improvements they made to the property and cannot claim the difference between the fixed rent and the market rental value. Condemnation is the act of the government taking over private property for public use, and inverse condemnation is when a property owner seeks compensation for the government taking their property without formal proceedings.
A more thorough explanation:
A no-bonus clause is a provision in a lease agreement that limits the damages a tenant can receive in case of governmental condemnation. This clause prevents the tenant from recovering the difference between the fixed rent and the property's market rental value.
For example, if a tenant has a lease agreement for a property that is condemned by the government, the no-bonus clause would limit the tenant's damages to the value of any improvements made to the property. The tenant would not be able to recover any additional compensation for the loss of the property or the difference between the fixed rent and the market rental value.
This clause is often included in lease agreements to protect landlords from having to pay additional compensation to tenants in case of condemnation. However, it can be disadvantageous for tenants who may lose their property without receiving fair compensation.