An association may become the legal or beneficial owner of tangible personal property or real property for the purpose of leasing such property, may obtain an assignment of a lessor’s interest in a lease of such property, and may incur obligations incidental to its position as the legal or beneficial owner and lessor of the leased property, if:

(1) The lease is a net, full-payout lease representing a noncancelable obligation of the lessee, notwithstanding the possible early termination of the lease.

Terms Used In California Financial Code 7701

  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Personal property: All property that is not real property.
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.

(2) At the expiration of the lease, the association’s interest in the property shall be liquidated or released on a net basis as soon as practicable.

(Added by Stats. 1984, Ch. 225, Sec. 8. Effective June 21, 1984.)

  Previous section
Next section  
 Article 10 Contents