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C. Effect of Condemnation. The Park Owner may make leases subject to <br />termination upon condemnation or sale in lieu of condemnation. <br />VI. FORMULAS FOR INCREASES TO MONTHLY RENTS <br />The Adjusted Monthly Rents shall be adjusted annually and shall be calculated as set <br />forthbelow~---- ___-------- -- --- ------- __ -_____ _---_ __ _ - __ __ _ _- <br />(1) From the Adjusted Monthly Rent subtract the existing amortized Capital <br />Improvement costs (Article VII) if any. This is the Monthly Rent. <br />(2) Multiply (1) by the Cost of Living, but not less than 2% nor more than <br />(3) Add the amount in (2) to the Monthly Rent. <br />(4) Add to (3) the amortized Capital Improvement costs, if any, including any <br />new amortized capital improvement costs. Round to the neazest half dollaz. This <br />is the Adjusted Monthly Rent. <br />VII. CAPITAL IMPROVEMENT COSTS <br />A. Capital Improvements; Amortization. If the Pazk Owner constructs new Capital <br />Improvements, the Pazk Owner shall amortize the costs, and shall be allowed to pass through to <br />the Residents the amortized costs, as provided in this Article. In addition, attached as Exhibit D <br />aze the Capital Improvements which exist at the Pazk and their original construction cost. If the <br />Pazk Owner rehabilitates or replaces any existing Capital Improvements, the Pazk Owner shall <br />amortize (as provided in this Article), and shall be allowed to pass through to the Residents, the <br />difference between the original cost of the Capital Improvement and the cost to rehabilitate or <br />replace the Capital Improvement, unless the useful life of such Improvement has expired. In that <br />case, the Park Owner shall amortize the entire cost of the Capital Improvement, and shall be <br />allowed to pass through to the Residents the amortized cost. Capital Improvement costs shall not <br />be amortized unless they exceed $2,000. Any costs as to any particular Capital Improvement <br />that aze under the threshold amounts ($2,000) shall not be amortized. Any Capital Improvement <br />costs that aze for maintaining, replacing, or repairing utilities shall not be amortized if the Pazk <br />Owner receives a reimbursement from a utility company for that purpose. <br />B. Amortization Periods. The Capital Improvement amortization periods shall be as <br />follows: <br />$ 2,000 - 3,499 2 years <br />3,500 - 5,999 3 years <br />6,000 - 8,999 4 years <br />9,000 - 13,999 5 yeazs <br />14,000 - 19,999 6 yeazs <br />20,000 - 29,999 7 yeazs <br />30,000 + 8 yeazs <br />6 <br />