Event that xyz homes fails to make timely rent payments

Reference no: EM133368461

Case:

XYZ Homes is a proptech company based in NYC. The Downtown Apartments signs a lease with XYZ Homes for certain apartments in exchange for the terms and conditions listed below: Term This Agreement shall commence on June 3, 2021, and expire on June 30, 2023 ("Term"). XYZ Homes may renew or extend the Term of this Agreement as provided herein Collection of Rent XYZ Homes shall be responsible for collecting rent from tenants of the units, as hereby authorized by the owner. The owner hereby grants XYZ Homes the right to commence and pursue legal action against tenants of the units in the event of nonpayment, nuisance, holdover, or other cause of action pertaining to the tenants' occupancy and/or use of the units. Owner's Base Monthly Income "Owner's base monthly income," listed in Schedule A annexed hereto, refers to the amount of monthly income that Owner can reasonably expect to receive ("Owner's Base Monthly Income") for the Units.

For the avoidance of doubt, the owner's base monthly income is not guaranteed by XYZ Homes. Owner's Base Monthly Income shall increase by 3% each year, starting on the first anniversary of the commencement date of this Agreement and increasing on the anniversary each year thereafter. Actual Rent Collected The "Actual Rent Collected" shall refer to the amount of rent actually collected by XYZ Homes from tenants of the units on a monthly basis, less any monies owed by the owner to XYZ Homes. For the avoidance of doubt, "actual rent collected" does not include additional rent, furniture reimbursement, or the value-add services fee, as hereinafter defined. Owner's Profit Share Each month, XYZ Homes will pay the owner all of the actual rent collected, up to an amount equal to the owner's base monthly rent. Any rent actually collected that exceeds the owner's base monthly rent shall be referred to as the "profit." Profit shall also include the value-add service fee, hereinafter described.

If a profit is collected in a given month, then the owner shall receive 20% of the profit ("Owner's Profit Share") in addition to the owner's base monthly income for that month. XYZ Homes shall retain 80% percent of the Profit. Guaranteed Minimum Income Notwithstanding anything to the contrary herein, beginning on XYZ 20th, 2021, XYZ Homes shall guarantee the owner a monthly minimum income equal to 70% of the owner's base monthly income in the first year of the term and 50% of the owner's base monthly income in the second year of the term ("Guaranteed Minimum Income").

In the event that the actual rent collected in a certain month during the term is less than the guaranteed minimum income, XYZ Homes will nonetheless pay the owner the guaranteed minimum income for that month. For the avoidance of doubt, the Guaranteed Minimum Income may be reduced by the Improvements Credit and/or Furniture Reimbursement, as hereinafter defined, if any, where applicable in any given month. Termination This Agreement may be terminated under the following conditions: Owner's Termination Rights

A. In the event that XYZ Homes fails to make the appropriate payments) to Owner in accordance with the time limitations provided for herein, then Owner may send XYZ Homes written notice of Owner's intent to terminate this Agreement ("Termination Notice"). XYZ Homes shall have fifteen (15) business days from the mailing date of the Termination Notice to pay to Owner the Actual Rent Collected. If payment is made timely by XYZ Homes, then this Agreement shall not terminate.

B. In the event that Owner does not receive an amount equal to three (3) months' of Owner's Base Monthly Income (less any Improvements Credit and/or Furniture Reimbursement) (the "Base Yearly Income"") for any three consecutive monthly payments from XYZ Homes to Owner, then Owner may send XYZ Homes a Termination Notice. XYZ Homes shall have fifteen (15) business days from the mailing date of the Termination Notice to pay to Owner the difference between the amount actually received by Owner during the first year of the Term and the Base Yearly Income. If XYZ Homes timely makes payment to Owner, then this Agreement shall not terminate. Schedule A: File attached. The flat fee charged by XYZ Homes is 12% for all the apartments. From the information above, we would like you to:

Question 1: Calculate the minimum amount that is owed by XYZ Homes and the flat fee amount that they would charge the Downtown Apartments for the apartments listed above for the month of February 2023.

Question 2: Assume that XYZ Homes has failed to send the rent for January 2023 & February 2023. By when can we send XYZ Homes a termination notice?

Question 3: Draft an email that the Downtown Apartments could send to XYZ Homes in the event that XYZ Homes fails to make timely rent payments.

Reference no: EM133368461

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