Abatement
Definition and meaning of Abatement in real estate.
Abatement is a reduction or temporary decrease in the amount of an obligation, such as rent, property taxes, or purchase price, due to specific circumstances or property defects. It is typically granted when a property's value or utility is diminished by unforeseen factors or when a municipality seeks to incentivize development.
In more detail
In leasing, a tenant may request a rent abatement if a portion of the property becomes uninhabitable because of damage, such as a fire or severe water leak. In home sales, a purchase price abatement can occur if a title defect or physical flaw is discovered before closing.
Additionally, local governments often offer property tax abatements to attract real estate developers to designated revitalization zones. The specific terms, conditions, and eligibility requirements for any abatement are generally governed by contracts or local regulations.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Common types | Tax abatement, rent abatement, and nuisance abatement |
| Typical timing | Negotiated during contract drafting or requested when damage occurs |
| Applies to | Residential leases, commercial leases, and municipal taxation |
A commercial tenant receives a rent abatement for two weeks after a burst pipe floods their retail space, making it impossible to open for business.
Frequently asked questions
What is a tax abatement program?
A tax abatement program reduces or eliminates property taxes on a home or building for a set period to encourage construction or renovation.
Does a tenant have an automatic right to rent abatement?
Not automatically. Rent abatement rights depend on state landlord-tenant laws and the specific terms written into the lease agreement.
Related terms
Sources & references
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