Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

6. Leases

Front Yard as Lessor

Our primary business is to lease single-family homes to families throughout the United States. Our leases to tenants generally have a term of one year with potential extensions, including month-to-month leases after the initial term. These leases are classified as operating leases.

Future contractual rents for the 14,221 properties that were leased as of June 30, 2020 are as follows ($ in thousands):

2020 (1)	$	83,192
2021	39,590
2022	1,516
2023	12
2024	—
Thereafter	—
	$	124,310

_____________

(1)Excludes the six months ended June 30, 2020.

Front Yard as Lessee

We lease office space and automobiles throughout the United States to support our property management function. We include lease right-of-use assets as a component of prepaid assets and other expenses, and we include lease liabilities as a component of accounts payable and accrued liabilities.

Operating Leases

We lease office space under various operating leases. As of June 30, 2020 and December 31, 2019, we applied a weighted average discount rate of 4.74% and 4.70%, respectively, to our office leases. We determine the discount rate for each lease to be either the discount rate stated in the lease agreement or the rate that we would be charged to finance real estate assets. Our weighted average remaining lease term was 1.6 years and 1.9 years as of June 30, 2020 and December 31, 2019, respectively.

During the three months ended June 30, 2020 and 2019, our operating leases resulted in rent expense related to long-term leases of $0.2 million and $0.1 million, respectively. During the six months ended June 30, 2020 and 2019, our operating leases resulted in rent expense related to long-term leases of $0.3 million and $0.3 million, respectively. Such expense is allocated amongst residential property operating expenses, property management expenses and general and administrative expenses.

At June 30, 2020 and December 31, 2019, we had operating lease right-of-use assets of $0.6 million and $0.9 million, respectively.

The following table presents our future lease obligations under our operating leases as of June 30, 2020 ($ in thousands):

	Operating Lease Liabilities
2020 (1)	$	300
2021	242
2022	121
2023	—
2024	—
Thereafter	—
Total lease payments	663
Less: interest	23
Lease liabilities	$	640

_____________

(1)Excludes the six months ended June 30, 2020.

Finance Leases

We lease vehicles under a master finance lease arrangement. At June 30, 2020 and December 31, 2019, the weighted average discount rate applied to our vehicle leases was 7.78% and 6.87%, respectively, based on the rates implied in the individual lease agreements. The weighted average remaining lease term was 3.4 years and 3.7 years as of June 30, 2020 and December 31, 2019, respectively.

During the three months ended June 30, 2020 and 2019, our finance leases resulted in $0.2 million and $0.1 million, respectively, of amortization of our lease right-of-use assets. During the six months ended June 30, 2020 and 2019, our finance leases resulted in $0.5 million and $0.3 million, respectively, of amortization of our lease right-of-use assets. Such expense is allocated amongst residential property operating expense, property management expenses and general and administrative expenses.

At June 30, 2020 and December 31, 2019, we had finance lease right-of-use assets of $2.6 million and $2.9 million, respectively.

The following table presents our future lease obligations under our finance leases as of June 30, 2020 ($ in thousands):

	Finance Lease Liabilities
2020 (1)	$	491
2021	928
2022	453
2023	121
2024	30
Thereafter	—
Total lease payments	2,023
Less: interest	165
Lease liabilities	$	1,858

_____________

(1)Excludes the six months ended June 30, 2020.

Leases

6. Leases

Front Yard as Lessor

Our primary business is to lease single-family homes to families throughout the United States. Our leases to tenants generally have a term of one year with potential extensions, including month-to-month leases after the initial term. These leases are classified as operating leases.

Future contractual rents for the 14,221 properties that were leased as of June 30, 2020 are as follows ($ in thousands):

2020 (1)	$	83,192
2021	39,590
2022	1,516
2023	12
2024	—
Thereafter	—
	$	124,310

_____________

(1)Excludes the six months ended June 30, 2020.

Front Yard as Lessee

We lease office space and automobiles throughout the United States to support our property management function. We include lease right-of-use assets as a component of prepaid assets and other expenses, and we include lease liabilities as a component of accounts payable and accrued liabilities.

Operating Leases

We lease office space under various operating leases. As of June 30, 2020 and December 31, 2019, we applied a weighted average discount rate of 4.74% and 4.70%, respectively, to our office leases. We determine the discount rate for each lease to be either the discount rate stated in the lease agreement or the rate that we would be charged to finance real estate assets. Our weighted average remaining lease term was 1.6 years and 1.9 years as of June 30, 2020 and December 31, 2019, respectively.

During the three months ended June 30, 2020 and 2019, our operating leases resulted in rent expense related to long-term leases of $0.2 million and $0.1 million, respectively. During the six months ended June 30, 2020 and 2019, our operating leases resulted in rent expense related to long-term leases of $0.3 million and $0.3 million, respectively. Such expense is allocated amongst residential property operating expenses, property management expenses and general and administrative expenses.

At June 30, 2020 and December 31, 2019, we had operating lease right-of-use assets of $0.6 million and $0.9 million, respectively.

The following table presents our future lease obligations under our operating leases as of June 30, 2020 ($ in thousands):

	Operating Lease Liabilities
2020 (1)	$	300
2021	242
2022	121
2023	—
2024	—
Thereafter	—
Total lease payments	663
Less: interest	23
Lease liabilities	$	640

_____________

(1)Excludes the six months ended June 30, 2020.

Finance Leases

We lease vehicles under a master finance lease arrangement. At June 30, 2020 and December 31, 2019, the weighted average discount rate applied to our vehicle leases was 7.78% and 6.87%, respectively, based on the rates implied in the individual lease agreements. The weighted average remaining lease term was 3.4 years and 3.7 years as of June 30, 2020 and December 31, 2019, respectively.

During the three months ended June 30, 2020 and 2019, our finance leases resulted in $0.2 million and $0.1 million, respectively, of amortization of our lease right-of-use assets. During the six months ended June 30, 2020 and 2019, our finance leases resulted in $0.5 million and $0.3 million, respectively, of amortization of our lease right-of-use assets. Such expense is allocated amongst residential property operating expense, property management expenses and general and administrative expenses.

At June 30, 2020 and December 31, 2019, we had finance lease right-of-use assets of $2.6 million and $2.9 million, respectively.

The following table presents our future lease obligations under our finance leases as of June 30, 2020 ($ in thousands):

	Finance Lease Liabilities
2020 (1)	$	491
2021	928
2022	453
2023	121
2024	30
Thereafter	—
Total lease payments	2,023
Less: interest	165
Lease liabilities	$	1,858

_____________

(1)Excludes the six months ended June 30, 2020.

Leases

6. Leases

Front Yard as Lessor

Our primary business is to lease single-family homes to families throughout the United States. Our leases to tenants generally have a term of one year with potential extensions, including month-to-month leases after the initial term. These leases are classified as operating leases.

Future contractual rents for the 14,221 properties that were leased as of June 30, 2020 are as follows ($ in thousands):

2020 (1)	$	83,192
2021	39,590
2022	1,516
2023	12
2024	—
Thereafter	—
	$	124,310

_____________

(1)Excludes the six months ended June 30, 2020.

Front Yard as Lessee

We lease office space and automobiles throughout the United States to support our property management function. We include lease right-of-use assets as a component of prepaid assets and other expenses, and we include lease liabilities as a component of accounts payable and accrued liabilities.

Operating Leases

We lease office space under various operating leases. As of June 30, 2020 and December 31, 2019, we applied a weighted average discount rate of 4.74% and 4.70%, respectively, to our office leases. We determine the discount rate for each lease to be either the discount rate stated in the lease agreement or the rate that we would be charged to finance real estate assets. Our weighted average remaining lease term was 1.6 years and 1.9 years as of June 30, 2020 and December 31, 2019, respectively.

During the three months ended June 30, 2020 and 2019, our operating leases resulted in rent expense related to long-term leases of $0.2 million and $0.1 million, respectively. During the six months ended June 30, 2020 and 2019, our operating leases resulted in rent expense related to long-term leases of $0.3 million and $0.3 million, respectively. Such expense is allocated amongst residential property operating expenses, property management expenses and general and administrative expenses.

At June 30, 2020 and December 31, 2019, we had operating lease right-of-use assets of $0.6 million and $0.9 million, respectively.

The following table presents our future lease obligations under our operating leases as of June 30, 2020 ($ in thousands):

	Operating Lease Liabilities
2020 (1)	$	300
2021	242
2022	121
2023	—
2024	—
Thereafter	—
Total lease payments	663
Less: interest	23
Lease liabilities	$	640

_____________

(1)Excludes the six months ended June 30, 2020.

Finance Leases

We lease vehicles under a master finance lease arrangement. At June 30, 2020 and December 31, 2019, the weighted average discount rate applied to our vehicle leases was 7.78% and 6.87%, respectively, based on the rates implied in the individual lease agreements. The weighted average remaining lease term was 3.4 years and 3.7 years as of June 30, 2020 and December 31, 2019, respectively.

During the three months ended June 30, 2020 and 2019, our finance leases resulted in $0.2 million and $0.1 million, respectively, of amortization of our lease right-of-use assets. During the six months ended June 30, 2020 and 2019, our finance leases resulted in $0.5 million and $0.3 million, respectively, of amortization of our lease right-of-use assets. Such expense is allocated amongst residential property operating expense, property management expenses and general and administrative expenses.

At June 30, 2020 and December 31, 2019, we had finance lease right-of-use assets of $2.6 million and $2.9 million, respectively.

The following table presents our future lease obligations under our finance leases as of June 30, 2020 ($ in thousands):

	Finance Lease Liabilities
2020 (1)	$	491
2021	928
2022	453
2023	121
2024	30
Thereafter	—
Total lease payments	2,023
Less: interest	165
Lease liabilities	$	1,858

_____________

(1)Excludes the six months ended June 30, 2020.