Legal Definitions - no-bonus clause

A no-bonus clause is a provision in a lease agreement that limits the damages a tenant can receive in case of governmental condemnation. This clause prevents the tenant from recovering the difference between the fixed rent and the property's market rental value.

For example, if a tenant has a lease agreement for a property that is condemned by the government, the no-bonus clause would limit the tenant's damages to the value of any improvements made to the property. The tenant would not be able to recover any additional compensation for the loss of the property or the difference between the fixed rent and the market rental value.

This clause is often included in lease agreements to protect landlords from having to pay additional compensation to tenants in case of condemnation. However, it can be disadvantageous for tenants who may lose their property without receiving fair compensation.