Leases

9 Months Ended

Sep. 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 14,286 properties that were leased as of September 30, 2020 are as follows ($ in thousands):

2020 (1)	$	49,595
2021	74,797
2022	2,241
2023	12
2024	—
Thereafter	—
	$	126,645

_____________

(1)Excludes the nine months ended September 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 September 30, 2020 and December 31, 2019, we applied a weighted average discount rate of 4.76% 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 1.5 years and 1.9 years as of September 30, 2020 and December 31, 2019, respectively.

During the three months ended September 30, 2020 and 2019, our operating leases resulted in rent expense related to long-term leases of $0.2 million and $0.2 million, respectively. During the nine months ended September 30, 2020 and 2019, our operating leases resulted in rent expense related to long-term leases of $0.5 million and $0.5 million, respectively. Such expense is allocated amongst residential property operating expenses, property management expenses and general and administrative expenses.

At September 30, 2020 and December 31, 2019, we had operating lease right-of-use assets of $0.5 million and $0.9 million, respectively.

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

	Operating Lease Liabilities
2020 (1)	$	153
2021	250
2022	122
2023	—
2024	—
Thereafter	—
Total lease payments	525
Less: interest	18
Lease liabilities	$	507

_____________

(1)Excludes the nine months ended September 30, 2020.

Finance Leases

We lease vehicles under a master finance lease arrangement. At September 30, 2020 and December 31, 2019, the weighted average discount rate applied to our vehicle leases was 7.79% and 6.87%, respectively, based on the rates implied in the individual lease agreements. The weighted average remaining lease term was 3.2 years and 3.7 years as of September 30, 2020 and December 31, 2019, respectively.

During the three months ended September 30, 2020 and 2019, our finance leases resulted in $0.2 million and $0.2 million, respectively, of amortization of our lease right-of-use assets. During the nine months ended September 30, 2020 and 2019, our finance leases resulted in $0.7 million and $0.5 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 September 30, 2020 and December 31, 2019, we had finance lease right-of-use assets of $2.3 million and $2.9 million, respectively.

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

	Finance Lease Liabilities
2020 (1)	$	238
2021	917
2022	450
2023	120
2024	30
Thereafter	—
Total lease payments	1,755
Less: interest	132
Lease liabilities	$	1,623

_____________

(1)Excludes the nine months ended September 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 14,286 properties that were leased as of September 30, 2020 are as follows ($ in thousands):

2020 (1)	$	49,595
2021	74,797
2022	2,241
2023	12
2024	—
Thereafter	—
	$	126,645

_____________

(1)Excludes the nine months ended September 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 September 30, 2020 and December 31, 2019, we applied a weighted average discount rate of 4.76% 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 1.5 years and 1.9 years as of September 30, 2020 and December 31, 2019, respectively.

During the three months ended September 30, 2020 and 2019, our operating leases resulted in rent expense related to long-term leases of $0.2 million and $0.2 million, respectively. During the nine months ended September 30, 2020 and 2019, our operating leases resulted in rent expense related to long-term leases of $0.5 million and $0.5 million, respectively. Such expense is allocated amongst residential property operating expenses, property management expenses and general and administrative expenses.

At September 30, 2020 and December 31, 2019, we had operating lease right-of-use assets of $0.5 million and $0.9 million, respectively.

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

	Operating Lease Liabilities
2020 (1)	$	153
2021	250
2022	122
2023	—
2024	—
Thereafter	—
Total lease payments	525
Less: interest	18
Lease liabilities	$	507

_____________

(1)Excludes the nine months ended September 30, 2020.

Finance Leases

We lease vehicles under a master finance lease arrangement. At September 30, 2020 and December 31, 2019, the weighted average discount rate applied to our vehicle leases was 7.79% and 6.87%, respectively, based on the rates implied in the individual lease agreements. The weighted average remaining lease term was 3.2 years and 3.7 years as of September 30, 2020 and December 31, 2019, respectively.

During the three months ended September 30, 2020 and 2019, our finance leases resulted in $0.2 million and $0.2 million, respectively, of amortization of our lease right-of-use assets. During the nine months ended September 30, 2020 and 2019, our finance leases resulted in $0.7 million and $0.5 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 September 30, 2020 and December 31, 2019, we had finance lease right-of-use assets of $2.3 million and $2.9 million, respectively.

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

	Finance Lease Liabilities
2020 (1)	$	238
2021	917
2022	450
2023	120
2024	30
Thereafter	—
Total lease payments	1,755
Less: interest	132
Lease liabilities	$	1,623

_____________

(1)Excludes the nine months ended September 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 14,286 properties that were leased as of September 30, 2020 are as follows ($ in thousands):

2020 (1)	$	49,595
2021	74,797
2022	2,241
2023	12
2024	—
Thereafter	—
	$	126,645

_____________

(1)Excludes the nine months ended September 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 September 30, 2020 and December 31, 2019, we applied a weighted average discount rate of 4.76% 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 1.5 years and 1.9 years as of September 30, 2020 and December 31, 2019, respectively.

During the three months ended September 30, 2020 and 2019, our operating leases resulted in rent expense related to long-term leases of $0.2 million and $0.2 million, respectively. During the nine months ended September 30, 2020 and 2019, our operating leases resulted in rent expense related to long-term leases of $0.5 million and $0.5 million, respectively. Such expense is allocated amongst residential property operating expenses, property management expenses and general and administrative expenses.

At September 30, 2020 and December 31, 2019, we had operating lease right-of-use assets of $0.5 million and $0.9 million, respectively.

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

	Operating Lease Liabilities
2020 (1)	$	153
2021	250
2022	122
2023	—
2024	—
Thereafter	—
Total lease payments	525
Less: interest	18
Lease liabilities	$	507

_____________

(1)Excludes the nine months ended September 30, 2020.

Finance Leases

We lease vehicles under a master finance lease arrangement. At September 30, 2020 and December 31, 2019, the weighted average discount rate applied to our vehicle leases was 7.79% and 6.87%, respectively, based on the rates implied in the individual lease agreements. The weighted average remaining lease term was 3.2 years and 3.7 years as of September 30, 2020 and December 31, 2019, respectively.

During the three months ended September 30, 2020 and 2019, our finance leases resulted in $0.2 million and $0.2 million, respectively, of amortization of our lease right-of-use assets. During the nine months ended September 30, 2020 and 2019, our finance leases resulted in $0.7 million and $0.5 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 September 30, 2020 and December 31, 2019, we had finance lease right-of-use assets of $2.3 million and $2.9 million, respectively.

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

	Finance Lease Liabilities
2020 (1)	$	238
2021	917
2022	450
2023	120
2024	30
Thereafter	—
Total lease payments	1,755
Less: interest	132
Lease liabilities	$	1,623

_____________

(1)Excludes the nine months ended September 30, 2020.