4. Four (4) Types of Leasehold/Less than Freehold Estates Flashcards by Frank Sebastian

ESTATE FOR YEARS

A lease for a definite period of time - days, weeks, months, or years
No notice required when lease expires
All people upon the disposition of realty must honor the remaining lease period unless the owner had a life estate

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4 Types of Leasehold/Less than Freehold Estates

Estate for Years … Estate for Period to Period … Estate at Will …
Estate at Sufferance

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ESTATE FOR PERIOD TO PERIOD

Lease with an indefinite end date but must specify from what period to what period
Both lessor and lessee must give an identical period of notice to terminate
All people upon the disposition of realty must honor the remaining lease period unless the owner had a life estate

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ESTATE AT WILL

Lessor consents to tenants staying

Terminates by notice or death of either lessor or lessee

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ESTATE AT SUFFERANCE

Created when tenant previous owner wrongfully holds over after expiration of leasehold or freehold estate without landlord’s consent

Must involve court to determine rights if tenant previous owner refuses to leave peacefully

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Three (3) ways of Transferring Tenant Occupancy Rights

Sublet … Assign … Novation

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SUBLET

> May have to have the permission of the owner
Original lessee becomes sublessor, person who the realty is sublet to is sublessee
Lessee remains liable
also called Sandwich Lease
Sublettee must pay sublettor/lessee who must pay lessor

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ASSIGN

> May have to have the permission of the owner
Original lessee gives up all rights to assignee
If they fail to fulfill original obligation, original lessee/assignor may be liable

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NOVATION

> must have permission of the owner
Complete substitution of original lease
original lesee is no longer responsible

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Three (3) Ways of Paying Tenant Occupancy Rights

Gross … Percentage … Triple Net

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GROSS

Tenant pays a fixed monthly rent e.g. apartment lease

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PERCENTAGE

Tenant pays a percentage of gross sales over a period of time plus fixed monthly rent e.g. shopping mall

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TRIPLE NET

Tenant pays their share of taxes, insurance, and fixed monthly rent e.g. Professional Tenant

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Other Terms of a Lease

Sale/Leaseback … Escalation Clause … Constructive Eviction …
Actual Eviction … Demise

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SALE/LEASE BACK

Seller sells then leases the realty back

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ESCALATION CLAUSE

Allows an increase in rent by a certain index on the realt

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CONSTRUCTIVE EVICTION

Allows to be broken by the lessee because the realty cannot be safely occupied

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ACTUAL EVICTION

Lessor involves court to force a lessee to be removed from the realty

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DEMISE

To lease realty

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Property Management … OBJECTIVES

> Preserve and enhance realty value
Generate money from realty
Accomplish owner of realty’s objectives

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Property Management - COMPENSATION PLANS

> Percentage of monthly billed invoices
Percentage of collected billed invoices
Set monthly dollar amount which may or may not include fringe benefits

Easements

> Right of one to use the land of another
Two (2) types of easements … Gross Easement
Appurtenant Easement

Easements - GROSS

> Personal interest or right to use land of another
Not inheritable or Assignable
Example: a utility company

Easements - APPURTENANT EASEMENT

> Remains with the land it is attached to
The dominant tenement is the one using the land of another
The servient tenement is the one allowing the use of their land and is responsible for all costs of the land including taxes
Passes to all grantees and is inheritable

Easements - APPURTENANT EASEMENT - two (2) types

Easement of Necessity ... Easement by Prescription

Appurtenant Easement - EASEMENT OF NECESSITY

Necessity of ingress (getting into) an degree (getting out of) e.g. landlocked piece of land

Appurtenant Easement - EASEMENT BY PRESCRIPTION

>Continuous use of land >Set by each state - require a definite period of time >Example: children crossing one's property on their way to school

Three (3) Ways to Legally Reference Realty -

Rectangular ... Metes and Bounds ... Lot and Block System

Three (3) Ways to Legally Reference Realty - RECTANGULAR (GOVERNMENT) SURVEY SYSTEM

Method of land description based on a checkerboard of townships

RECTANGULAR (GOVERNMENT) SURVEY SYSTEM - components

Baselines ... Range lines ... Principal Meridians ... Township lines ... Township ... Section ... Government lot ... Correction lines ... Section 16 ... Area ... Mile ... Section

Rectangular (Gov) Survey System - BASELINES

Main east and west lines, also called tier or township lines

Rectangular (Gov) Survey System - RANGE LINES

Imaginary lines 6 miles east and west of the meridian running north and south

Rectangular (Gov) Survey System - PRINCIPAL MERIDIANS

Main north and south lines, also called range lines

Rectangular (Gov) Survey System - TOWNSHIP LINES

Imaginary lines 6 miles north and south of the baseline running east and west

Rectangular (Gov) Survey System - TOWNSHIP

A six mile square area containing 36 sections

Rectangular (Gov) Survey System - SECTION

1 square mile containing 640 square acres. Sections are numbered from the northeast corner of a township and run east and west in a six mile area, drop down and then west to east another six miles till they reach to section 36 in the southeast corner

Rectangular (Gov) Survey System - GOVERNMENT LOT

Fractional sections of land measuring less than a quarter section

Rectangular (Gov) Survey System - CORRECTION LINES

Usually on the north end of a check to compensate for the curvature of the earth's surface

Rectangular (Gov) Survey System - SECTION 16

Typically reserved for schools

Rectangular (Gov) Survey System - ACRE

One acre is 43,560 square feet

Rectangular (Gov) Survey System - SECTION AREA

640 acres in a section

Metes and Bounds

Method of land description identifying property by distance and direction

Metes and Bounds - METES

Describes distances

Metes and Bounds - BOUNDS

Describes direction - Begins at a point of beginning (POB), follows the perimeter, returns to the (POB) Used extensively in original 13 eastern states and Texas

Lot and Block System - components (4)

Lot ... Block ... Plat Map ... Topographical Map

Lot and Block System - LOT

An individual parcel of land intended to be conveyed in its entirety

Lot and Block System - BLOCK

A group of contiguous lots bounded by streets in a city block

Lot and Block System - PLAT MAP

An aerial view showing a lot of realty in relation to others in the subdivision

Lot and Block System - TOPOGRAPHICAL MAP

An aerial view showing elevation of the realty

Legal terms to be familiar with - LIENS

A claims of money one has against the property of another All liens are encumbrances but not all encumbrances are liens

Legal terms to be familiar with - MECHANICS LIEN

Applied by persons making repairs or doing work on the property Specific to the realty for owner failing to pay the debt Lien takes affect from the day the work began not finished

Legal terms to be familiar with - LACHES

Loss of legal rights due to failure to assert them on a timely basis