Ch. 18 Leasing

Question 1

actual eviction

Answer 1

when a tenant breaches a lease or improperly retains leased premises, the landlord may regain possession through this legal process (suit for possession)

Question 2

assignment

Answer 2

a tenant transfers the entire leasehold interest to another person

Question 3

constructive eviction

Answer 3

leased premises become unusable for the purpose stated in the lease, the tenant may have the right to abandon them

Question 4

estate (tenancy) at sufferance

Answer 4

arises when a tenant who lawfully took possession of real property continues in possession of the premises without the landlord’s consent after the right of possession has expired

Question 5

estate (tenancy) at will

Answer 5

gives the tenant the right to possess property with the landlord’s consent for an unspecified or uncertain term

Question 6

estate (tenancy) from period to period

Answer 6

periodic tenancy, created when the landlord and tenant enter into an agreement for an indefinite time-lease does not contain a specific expiration date (automatically renewing)

Question 7

gross lease

Answer 7

tenant pays a fixed rent and some or all of the utility expenses, while the landlord pays all taxes, insurance, repairs, any other utility expenses, and maintenance connected with the property

Question 8

ground lease

Answer 8

when a landowner leases unimproved land to a tenant who agrees to erect a bldg on the land (usually net leases)

Question 9

holdover tenancy

Answer 9

lessee retains possession of leased property after the lease has expired and the landlord, by continuing to accept rent, agrees to the tenant’s continued occupancy as defined by state law

Question 10

lease

Answer 10

the foundation of the relationship between a property owner and tenant is the lease. A lease is a contract between a lessor and a lessee

Question 11

lease purchase

Answer 11

is used when a tenant wants to purchase the property but is not yet able to do so

Question 12

leasehold estate

Answer 12

A tenant’s right to possess real estate for the term of the lease. A leasehold is generally considered personal property

Question 13

lessee

Answer 13

a person who holds the lease of a property; a tenant.

Question 14

lessor

Answer 14

the owner of real estate, or landlord

Question 15

month-to-month tenancy

Answer 15

created when a tenant takes possession with no definite termination date and pays monthly rent

Question 16

net lease

Answer 16

the tenant pays all or most of the property expenses, such as hazard insurance, property taxes, and/or common are maintenance (CAM)

Question 17

nondisturbance clause

Answer 17

included in the financing instrument used to mortgage leased premises A type of clause in a mortgage contract. that ensures that the rental agreement between the tenant and the landlord will continue under any circumstances. This is done primarily to protect the renter from eviction by the mortgagor if the property is foreclosed upon.
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Question 18

percentage lease

Answer 18

either a gross lease or a net lease/The rent is based on a minimum fixed rental fee plus a percentage of the gross income received by the tenant doing business on the leased property

Question 19

purchase option

Answer 19

A lease that grants the lessee the option to purchase the leased premises

Question 20

renewal option

Answer 20

A lease that contains a clause that grants the lessee the privilege of renewing the lease

Question 21

rent

Answer 21

a fixed, periodic payment made by a tenant of a property to the owner for possession and use, usually by prior agreement of the parties

Question 22

reversionary right

Answer 22

the return of the rights of possession and quiet enjoyment to the lessor at the expiration of a lease

Question 23

right of first refusal

Answer 23

allows the tenant the opportunity to buy the property before the owner accepts an offer from anther party

Question 24

sale-and-leaseback

Answer 24

property owner sells the property and then lease it back for an agreed period and rental /Allows the original owner to use the property as a tenant while freeing up capital for other business purposes

Question 25

security deposit

Answer 25

used if the tenant defaults on payment of rent or destroys the premises

Question 26

sublease

Answer 26

a tenant transfers less than the entire leasehold interest by subletting the premises to a new tenant

Question 27

estate (tenancy) for years

Answer 27

a leasehold estate that continues for a definite period of time. Always has a specific starting and ending date

Question 28

Graduated lease

Answer 28

provides for specified rent increases at set future dates

Question 29

Index lease

Answer 29

allows rent to be increased or decreased periodically

Question 30

Oil & Gas Lease

Answer 30

lease covers subsurface rights, if oil or gas is found, the landowner usually receives a percentage of its value as a royalty. As long as oil or gas is obtained in significant quantities, the lease continues indefinitely.

Question 31

Sales Clause

Answer 31

Opposite of the nondisturbance clause, a lease may contain a sales clause stating that requires the tenant be given some period of notice before termination under a new landlord/ or may terminate or renegotiate terms of the lease