Top Menu

Frequently Asked Questions:

What is non-cash or in-kind consideration?

Non-cash or in-kind consideration is an alternative to cash rent. Examples include a CSA share, cordwood, or property maintenance services (not otherwise required by the lease). Both parties should consult their respective advisors to understand the tax considerations associated with these kinds of arrangements. See In-Kind Rent Fact Sheet.

For a lease to be a legal contract, there must be some exchange of value. If there is “no rent” at all, the rights conferred are considered a gift, which renders the lease unenforceable, and subjects the relationship to different tax consequences. Therefore, an agreement in which the land user pays no rent is not a legal lease contract. Items, services, and even promises qualify as in-kind consideration. The value contributed by each party doesn’t need to be equal – it just needs to have some value. See the In-Kind Rent and the No “Free Rent” Fact Sheets.

Posted in: Rent and Other Consideration