CH 3 Flashcards
Name 4 things that are required for every lease
- Mutuality
- Capacity to contract
- Legal Purpose
- Consideration
A lease that automatically renews itself, in the absence of notification by either party is what kind of lease?
A periodic tenancy
A tenant pays taxes and insurance and all maintenance expenses. What kind of a lease do they have?
Net lease
What kind of lease would a Jewelry store be most likely to have?
Percentage lease
A transfer by a lessee of all interest in a lease to a third party, who agrees to accept the lease obligations would be a:
Assignment
When the value of the premises has increased significantly above the rent specified in the lease an economic tenant would be better off to:
Sublease the premises
In qualifying a prospective tenant, you should be interested in tenants (3)
- Income
- Credit History
- Rental History
If you believe that rents will increase significantly in the near future, the leases you negotiate for the owners, should:
Be for short periods of time
Rent incentives are most likely to be given when?
There is a high vacancy factor
When is a lessor most likely to be successfully obtain an above market rent?
When negotiating a lease renewal and when giving rent incentives.
Explain Gross Lease?
A level payment lease. The owner pays taxes, insurance, etc.
Explain Percentage Lease?
A lease where the rent is set at a percentage of income.
Explain periodic tenancy?
A tenancy from period to period that renews itself unless notice is given to terminate.
Explain an estate for years?
A lease having a definite termination date.
Explain Flat Lease?
Similar to a gross lease.
