What Is An Abatement?
In real estate, an abatement is a reduction, deduction, or counter measure taken against a rent, tax, nuisance, or hazard. Free rent from the landlord is an example of an abated rent. A reduction in property taxes as an incentive for a property upgrade is an example of an abated tax.
Rent Abatements
A rent abatement is a reduction in the amount of rent paid to the landlord by a tenant. The amount of rent may be reduced, or the tenant can receive free rent for one or more rental periods.
Rent abatements can arise as a matter of lease negotiations. Abated Rent can also arise in situations where the landlord incurs a financial obligation to the tenant.
During lease negotiations, landlords can offer concessions to tenants to entice them into a lease agreement. One type of lease concession landlords can offer is a abated rent. If the tenant is desirable enough, the landlord may offer free rent, or a reduction in rent for a period of time as an inducement into the lease.
Rent abatements can also be used in combination with other concessions to ensure the tenant doesn’t leave any money on the table. One example is a tenant who does not fully use a tenant improvement allowance. The tenant can potentially negotiate a rent abatement in the amount of the unused portion of the TI allowance.
Tenants can also attempt to negotiate a rent abatement with the landlord if certain conditions are met during the lease period. Anything that can jeopardize the tenant’s business, particularly if it is due to an action by the landlord, may justify a rent abatement.
In other situations, landlords may owe monies to tenants. This can arise when a tenant must conduct repairs that the landlord is responsible for. Instead of writing a check, the landlord and tenant can agree to a reimbursement in the for of a rent abatement.
Abatement Of A Nuisance
Noise, smoke, odors, overhanging trees, roots that cross property lines, and many other things can be a nuisance to neighbors and surrounding properties. These nuisances can hinder surrounding owners and occupants from reasonably enjoying the use of their properties.
Property owners and occupants can pursue an abatement against nuisances that infringe on their property rights through several channels. Owners can directly approach property owners or persons causing the nuisance and ask them to abate, or remove the nuisance they are the cause of.
In certain cases, a property owner can self-abate by removing the nuisance him/herself. However, self-abatement does not relieve the aggrieved party from any liability if there are consequences that result from their actions.
Civil action is another avenue property owners can take to abate a nuisance. Public entities can remove nuisances or address code violations through abatement.
Property Tax Abatements
A Property Tax Abatement or Real Estate Tax Abatement is a reduction in property taxes owed on real estate. Property tax abatements may be offered by local governments as an incentive, or sought by property owners who feel they may have been overtaxed.
Local county and city governments can assess taxes on real property located in their jurisdictions. Sometimes local governments try and encourage property owners to invest in their property or promote development in their areas. To provide an incentive, local government can offer a reduction in property taxes. This reduction in property taxes is an abated tax.
In some cases, property owners may seek a reduction in the property taxes they owe. Property taxes are based on assessed property values which can change as property values are reassessed in accordance with increased market values. If a property owner feels their property has been overvalued, the property owner may be able to seek a reduction in their property tax, also known as tax abatement.