Add What is a Ground Lease?
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<br>Ground leases are a kind of long-term lease contract in which a landlord can rent their residential or commercial property to a tenant who will make improvements to the land. Ground leases prevail among industrial leases due to the fact that they permit organizations to operate on costly real estate or commercial property that they can't manage to purchase out right. In turn, property managers can benefit from enhancements to the land and occupants can conserve money on realty costs.<br>
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<br>A ground lease is a type of long-lasting lease arrangement that permits a renter to [build-and momentarily](https://scoutmoney.co) own-improvements on the rented land. Ground leases prevail in industrial property and can typically last up to 20-99 years. During the lease term, the renter typically develops residential or commercial property for service usage. At the end of the term, they'll move ownership of the residential or commercial property to the property owner.<br>
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<br>A big franchise may make use of a ground lease to expand its business into urban areas with high realty expenses. This would permit them to develop a branch in a largely populated area without having to acquire pricey land upfront.<br>
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<br>Because the ground lease process frequently includes advancement, occupants may need to get loans to cover building and construction and other associated expenses.<br>
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<br>Two primary types of ground lease contracts account for the threats associated with loans:<br>
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<br>Subordinated ground leases put the loan lending institution's claims to the residential or commercial property above the property owner's. This produces a greater threat of losing the land if the tenant defaults, but permits the property manager to work out higher lease payments with the occupant. In turn, the occupant might have the ability to more easily protect a loan with much better rates of interest.
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<br>Unsubordinated ground leases give the proprietor top priority above the lending institution. This is a more stable and common option for property managers, but it may make it harder for renters to protect a loan. As an incentive, landlords may provide lower lease rates to tenants who accept an unsubordinated ground lease.
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<br>
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FAQs<br>
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<br>Who owns the building in a ground lease?<br>
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<br>Generally, tenants in a ground lease just pay lease on the land itself and retain ownership of any improvements they make, such as structures they construct on the residential or commercial property. However, ownership of those enhancements transfers to the property manager when the ground lease expires.<br>
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<br>What takes place if you default on a ground lease?<br>
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<br>That depends on the context of the lease and which celebration defaults. In a subordinated ground lease, the landlord dangers losing ownership of the land if a renter defaults on a loan. Conversely, the occupant might possibly lose the building they constructed if the property owner defaults on financial obligations.<br>
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<br>Who pays residential or commercial property taxes in a ground lease contract?<br>
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<br>While it depends on the lease agreement, occupants are typically accountable for residential or commercial property taxes, insurance, upkeep, and repairs.<br>
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<br>What's the difference in between ground leases vs. land leases?<br>
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<br>Both ground and land leases lease land to a renter. However, ground leases tend to permit tenants to establish the land, while a land lease may not.<br>
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<br>Still have legal questions?<br>
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<br>Our network of lawyers can assist. Get endless 30-minute consultations on new legal subjects with our legal services strategy.<br>
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<br>Discover more topics<br>
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<br>A<br>
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<br>- Affidavit
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<br>- Alimony
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<br>[- Annual](https://www.aber.ae) Report
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<br>- Appreciation
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<br>- Articles of Incorporation
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<br>- Articles of Organization
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<br>- Asset Turnover Ratio<br>[homes.com](https://www.homes.com/property/6394-town-isle-rd-kirkville-ny/j1v4vwbqkrwpl/?msockid=2ee5721de8a46f171f0b6414e9386e87)
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<br>B<br>
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<br>- Beneficiary
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<br>- Receipt
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<br>- Bookkeeping
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<br>- Box 12 on W-2
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<br>- Breach of Contract
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<br>- Business License
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<br>- Business Owners Group (BOG)<br>
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<br>C<br>
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<br>- CapEx
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<br>- Capital
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<br>- Cease and Desist Letter
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<br>- Cease and Desist Order
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<br>- Civil Union
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<br>- Codicil
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<br>- Commis
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<br>- Community Residential Or Commercial Property State
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<br>- Contested Divorce
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<br>- Contingent [Beneficiary](https://inmocosta.com)
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<br>- Copyright Infringement
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<br>- Corporate Resolution
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<br>- Covenant Marriage
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<br>[- Current](https://royalestatesdxb.com) Ratio
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<br>- Custodial Parent<br>
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<br>D<br>
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<br>- DBA
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<br>- Deed of Trust
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<br>- Defamation of Character
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<br>- Depreciation
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<br>- Disregarded Entity
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<br>- Dissolution
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<br>- Domestic Partnership<br>
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<br>E<br>
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<br>- EIN Number
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<br>- EULA
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<br>- Easement
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<br>- Estate Sale
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<br>- Ex Parte
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<br>- Executor of a Will
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<br>- Expense Ratio<br>
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<br>F<br>
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<br>- FEIN
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<br>- FIFO Method
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<br>- FUTA
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<br>- Fiduciary Duty
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<br>- Financial Statement
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<br>- First-Class Postage
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<br>- Fixed Asset Turnover
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<br>- Fixed Cost
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<br>- Food Runner
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<br>- Foreign Qualification
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<br>- Franchise Business
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<br>- Franchise Tax<br>
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<br>G<br>
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<br>- GAAP
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<br>- Gift Tax
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<br>- Goodwill
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<br>- Grantor
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<br>- Grantor Trust
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<br>- Gratuity
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<br>- Gray Divorce
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<br>- Gross Lease
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<br>- Gross Profit
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<br>- Gross Profit Margin
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<br>- Gross Profit Ratio
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<br>- Gross Sales and Net Sales
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<br>- Ground Lease<br>
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<br>H<br>
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<br>- Hold Harmless Agreement
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<br>- Holographic Will<br>
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<br>I<br>
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<br>- Incorporation
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<br>- Indemnification
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<br>- Independent Contractor
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<br>- Informed Delivery
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<br>- Intellectual Residential or [commercial property](https://alamrealty.com)
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<br>- Irrevocable Trust<br>
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<br>J<br>
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<br>- Joint Custody
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<br>- Joint [Tax Payment](https://cubicbricks.com)
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<br>- Joint Tenancy<br>
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<br>K<br>
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<br>- K- 1<br>
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<br>L<br>
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<br>- LLC
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<br>- LLP
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<br>- Lady Bird Deed
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<br>- Landlord
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<br>- Lawyer
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<br>- Lease Agreement
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<br>- Ledgers
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<br>- Lessee
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<br>- Lessor
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<br>- Levy
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<br>- Liability
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<br>- Life Estate
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<br>- Living Trust
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<br>- Living Will<br>
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<br>M<br>
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<br>- MACRS
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<br>- Mailing Address
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<br>- Marginal Costs
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<br>- Medical Power of Attorney
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<br>- Meeting Minutes
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<br>- Miranda Rights<br>
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<br>N<br>
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<br>- NDA
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<br>- Net Asset Value (NAV).
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<br>- Net Assets.
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<br>[- Earnings](https://atofabproperties.com).
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<br>- Net Profit.
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<br>- Net Revenue.
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<br>- Net Sales.
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<br>- No-Fault Divorce.
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<br>- Noncompete<br>
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<br>O<br>
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<br>- Operating Agreement.
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<br>- Operating Capital.
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<br>- Operating Expenses.
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<br>- Overhead<br>
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<br>P<br>
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<br>- P.O. Box.
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<br>- PLLC.
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<br>- PTIN.
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<br>- Pass-Through Taxation.
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<br>- Patent Attorney.
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<br>- Patent Troll.
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<br>- Per Stirpes.
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<br>- Pooled Trust.
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<br>- Postal Code.
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<br>- Pour-Over Will.
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<br>- Power of Attorney.
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<br>- Prenup.
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<br>- Primary Beneficiary.
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<br>- Principal.
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<br>- Priority Mail.
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<br>- Probate Attorney.
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<br>- Court of probate.
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<br>- Profit.
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<br>- Profit & Loss.
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<br>- Promissory Note.
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<br>- Residential or commercial property Deed.
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<br>- Public Benefit Corporation.
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<br>- Purchase Agreement.
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<br>- Order (PO)<br>
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<br>Q<br>
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<br>- Quid Pro Quo.
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<br>- Quitclaim Deed<br>
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<br>R<br>
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<br>- Registered Agent.
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<br>- Residential Address.
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<br>- Return on Equity (ROE)<br>
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<br>S<br>
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<br>- S Corp.
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<br>- SG&A.
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<br>- Secretary of State.
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<br>[- Service](https://avitotanger.com) Mark.
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<br>- Single-Member LLC.
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<br>- Slogan.
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<br>- Sole Proprietorship.
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<br>- Statute of Limitations.
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<br>- Statutory Agent.
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<br>- Straight-Line Depreciation.
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<br>- Sublease.
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<br>- Successor Trustee.
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<br>- Surety Bond.
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<br>- Sweat Equity<br>
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<br>T<br>
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<br>- TOD.
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<br>- Tenancy in Common.
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<br>- Testamentary Trust.
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<br>- Total Asset Turnover.
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<br>- Brand name.
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<br>- Trade Secret.
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<br>- Trademark Search.
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<br>- Transactions.
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<br>- Triple Net Lease.
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<br>- Trustee<br>
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<br>U<br>
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<br>- Unilateral Contract.
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<br>- Unlawful [Detainer](https://homes.lc).
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<br>- Utility Patent<br>
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<br>V<br>
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<br>- Vendors.
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<br>- Vicarious Liability.
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<br>- [Virtual Mail](https://leasingangels.net).
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<br>- Virtual Office<br>
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<br>W<br>
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<br>- Warranty Deed.
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<br>- Wet Signature.
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<br>- What is gross earnings?
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<br>- Will<br>
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<br>X<br>
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<br>- X-Inefficiency.
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<br>- XD<br>
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<br>Y<br>
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<br>- Yellow Dog Contract.
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<br>- Yield<br>
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<br>Z<br>
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<br>- Zoning Laws<br>
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<br>Additional resources<br>
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<br>- irs.gov.
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- usa.gov<br>
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