Defined terms in a contract establish clear meanings for specific words or phrases used throughout the document to ensure clarity and prevent misunderstandings. They are typically capitalized and listed in a dedicated section, providing a reference point for interpreting the contractual terms consistently.
Refer to “Defined Terms and Non-GAAP Reconciliations” for definitions of metrics and reconciliations to GAAP.
Defined Terms and Non-GAAP Reconciliations (Unaudited) Average Blended Change in Rent The percentage change in rent on all non-month-to-month lease renewals and re-leases during the period, compared to the annual rent of the previous expired non-month-to-month comparable long-term lease for each individual property. Average Change in Rent for Re-Leases The percentage change in annual rent on properties re-leased during the period, compared to the annual rent of the comparable long-term previous expired lease for each individual property. Average Change in Rent for Renewals The percentage change in rent on non-month-to-month comparable long-term lease renewals during the period. Average Monthly Realized Rent For the related period, Average Monthly Realized Rent is calculated as the lease component of rents and other single-family property revenues (i.e., rents from single-family properties) divided by the product of (a) number of properties and (b) Average Occupied Days Percentage, divided by the number of months. For properties partially owned during the period, this calculation is adjusted to reflect the number of days of ownership.
Defined Terms and Non-GAAP Reconciliations Property Enhancing Capex Includes elective capital expenditures to enhance the operating profile of a property, such as investments to increase future revenues or reduce maintenance expenditures.
Defined Terms and Non-GAAP Reconciliations (continued) (Unaudited) Credit Ratios We present the following selected metrics because we believe they are helpful as supplemental measures in assessing the Company’s ability to service its financing obligations and in evaluating balance sheet leverage against that of other real estate companies. The tables below reconcile these metrics, which are calculated in part based on several non-GAAP financial measures.
Defined Terms and Non-GAAP Reconciliations (continued) (Unaudited) Platform Efficiency Percentage Management costs, including (1) property management expenses, net of tenant charge-backs and excluding noncash share-based compensation expense, (2) general and administrative expense, excluding noncash share-based compensation expense and (3) leasing costs, as a percentage of total revenues, net of tenant charge-backs and other revenues.
Defined Terms and Non-GAAP Reconciliations (continued) (Unaudited) Retained Cash Flow Retained Cash Flow is a non-GAAP financial measure that we believe is helpful as a supplemental measure in assessing the Company’s liquidity. This metric is computed by reducing Adjusted FFO attributable to common share and unit holders by common distributions. Refer to Funds from Operations for a reconciliation of Adjusted FFO attributable to common share and unit holders to net income attributable to common shareholders, determined in accordance with GAAP. The following is a reconciliation of Adjusted FFO attributable to common share and unit holders to Retained Cash Flow (amounts in thousands):
The definition of “Minimum Collateral Value” in Section 1.01 (Defined Terms) is hereby amended by deleting such definition in its entirety and inserting in its place the following: “Minimum Collateral Value” means an amount equal to (i) 250.0% multiplied by (ii) (a) the sum of the LOC Exposure and the Custodian’s Priority Indemnity Amount, minus (b) the sum of the amount of Cash held in the Collateral Account and the Market Value of Cash Equivalents held in the Collateral Account. In no event shall the Minimum Collateral Value be less than zero.
The definition of “Permitted Indebtedness” in Section 1.01 (Defined Terms) is hereby amended by deleting such definition in its entirety and inserting in its place the following: “Permitted Indebtedness” means Indebtedness of the Borrower not to exceed $545.0 million at any time.
Defined terms are specific words or phrases in a legal document that have been given a particular meaning or definition. These definitions are typically provided at the beginning of a contract or in a dedicated section to ensure clarity and consistency throughout the document. By using defined terms, all parties to a contract have a common understanding of what certain words or phrases mean in the context of that agreement.
Defined terms should be used whenever there are words or phrases that might be ambiguous, complex, or subject to multiple interpretations. They are particularly useful in lengthy or intricate contracts where precision is critical, as they help prevent misunderstandings and disputes. Some common scenarios include:
When writing defined terms, consider the following guidelines:
Placement and Structure: Define terms in a separate, clearly marked section, usually titled “Definitions” at the beginning or end of the contract. Each term should be listed with its definition.
Formatting: Use consistent formatting to easily identify defined terms within the document, such as capitalizing the first letter of each defined word or phrase.
Clarity and Precision: Craft the definitions to be clear and precise, avoiding unnecessary complexity. Definitions should be comprehensive but not overly broad.
Avoid Circular Definitions: Ensure that definitions are not circular, meaning that they do not rely on the term being defined in their explanation.
“Affiliate” means any entity that directly or indirectly controls, is controlled by, or is under common control with the specified entity.
Defined terms are commonly found in a wide range of contracts, including but not limited to:
Using defined terms judiciously in these contracts helps streamline negotiation, execution, and enforcement by ensuring all parties clearly understand their meanings and implications.
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Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
The "Definition of Affiliate" clause provides a clear explanation of what constitutes an affiliate relationship between entities, often defining an affiliate as any entity that directly or indirectly controls, is controlled by, or is under common control with a party. This clause is crucial in determining the scope of responsibilities, rights, and obligations that may extend to associated entities within a contractual agreement.
A "Change of Control" clause defines the conditions under which a shift in ownership or management of a company occurs, typically outlining scenarios like mergers, acquisitions, or significant transfers of shares. This clause ensures that both parties are aware of the triggers that could alter the contractual relationship or obligations under the agreement.
The "Definition of Environmental Laws" clause outlines the specific legislations, regulations, and legal frameworks that pertain to the protection and conservation of the environment. This clause details applicable federal, state, and local environmental statutes, compliance requirements, and the standards that the parties involved in a contract must adhere to.
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