Chapter 10 Flashcards
Abatement
A decrease or reduction. A tenant might be entitled to an abatement of rent if the rented premises are damaged by a storm.
Actual eviction
A legal process to remove a tenant who holds over after the right of possession has ended, usually resulting from failure to pay rent.
Assignment
Relative to a lease, an assignment is a complete transfer of the tenants remaining lease holdest state. The original tenant remains liable to the landlord for the unpaid rent should the new tenant default.
Certified Property Manager (CPM)
A professional designation for one who has met all the education and experience requirements of the Institute of Real Estate Management
Condemnation clause
At least provision which specifies that proceeds to be paid to the landlord any event the least premises are required by the government through condemnation
Construction eviction
Occurs when the landlords actions or omissions allow the least premises to become uninhabitable for its intended use. Usually a violation of the implied warranty of habitability or the implied covenant of quiet enjoyment.
Contract rent
The amount of rent stated in a lease agreement
Economic rent
The amount of rent a property could command in the open market also called market rent
Ejectment
The legal process to have a trespasser or tenant at sufferance removed from property
Escalator clause
A lease provision which calls for changes in rental payments at specific intervals in the future
Escalator lease
A lease which provides for rental increases in relation to increased operating expenses
Estate at will
A tenant’s interest in real property for an indefinite period of time. Either party may terminate the estate upon proper notice. Death of either party terminates an estate at will also known as Tenancy for year
Eviction
In action which results in disposition of a tenant from leased premises. The action may be either actual or constructive.
Graduated lease
Any lease which provides for rental changes in the future
Gross lease
Also called flat lease or straight lease. The tenant pays a fixed amount at specified intervals. The landlord pays all expenses associated with owning the least premises.
Ground lease
A long-term, net lease of unimproved land with permission for the tenant to make improvements.
Hypothecation
The borrowers retaining possession of property pledged as security for a mortgage loan
Implied Warranty of Habitability
The landlords imply duty to keep a dwelling unit at a minimum level of livability 
Index lease
One which requires that rent be adjusted up or down periodically based upon changes in a designated index, such as the Consumer Price Index
Landlord
One who leases real property to another also called lessor
Lease
A contract which also conveys an estate by granting one person the exclusive right to temporary early use the property of another and at the same time specifies the rights and obligations of the parties. A lease is the personal property of the lessee
Leased fee estate
The landlord estate in property leased to another
Leasehold improvements
Improvements made to leased premises by the tenant
Lessee
Tenant
Lessor
Landlord
Management contract
And agreement which authorizes a property manager to act on behalf of the owner
Market rent
The amount for which a property should rent based upon comparisons made with similar properties currently under lease. It is also known as economic rent, usually determined by an appraisal
Net lease
One which requires the tenant to pay the landlord a fixed rental amount plus all or part of certain operating expenses, such as taxes, insurance, and maintenance and repairs
Non-disturbance agreement
A provision in a mortgage for larger income properties in which the lender agrees to honor the leases (not disturbed the tenants) in the event of foreclosure; thereby enabling the owner to obtain large, important tenants known as anchor tenets.
Occupancy agreement
Also known as move in agreement. An agreement which allows a purchaser to take possession for a short term, pending the closing of a sales contract
Operating budget
A property manager‘s projection of operating expenses and reserve for replacements and repairs. The budget serves as a guideline during the year of operation and must be revised as actual results point out items in the budget which need correction.
Percentage lease
A lease which bases the rental amount on a percentage of either gross sales, gross profit, or net income. Generally, the tenant is required to pay a flat rental fee plus a percentage of the gross sales which exceed a certain minimum. Percentage leases are normally used in retail store operations.
Protective covenant
A lease provision which prohibits certain use of the least premises in order to eliminate competitive businesses within the same facility owned by the landlord
Public trustee
A government official who act as trusty for borrower and lender when a trust deed is used as a security instrument in lieu of a mortgage
Reappraisal lease
One which base is the rental amount on the market rent of the property. At set intervals the property is reappraised to establish its current rent, at which time the contract rent is adjusted accordingly.
Rent schedule
The rental rate for a property based upon its current level of occupancy
Restrictive covenant
A lease provision which requires the least premises to be used only for certain purposes
Reversionary estate
The landlords right to regain possession of leased premises when the leased is terminated
Right of first refusal
A lease provision which assures the tenant of the right to buy the least premises at the same price offered by a bona fide purchaser
Sale lease back
A financing arrangement which enables a business property owner to sell owned property with an agreement to lease it back on a long-term, net lease basis from the investor who bought it
Sandwich leasehold
A tenants interest in the leased premises which have been sublet to another tenant
Step-up lease
One which provides for rental payment increases and predetermined amounts
Sublease
Also called sublet. A transfer of less than the tenants entire remaining leasehold estate to another person
Subordination clause
A lease provision which makes the lease inferior in priority to a future mortgage placed against the leased premises
Surrender and Acceptance
Termination of a lease by mutual agreement of the parties. Also known as surrender
Tenet
One who leases property from a landlord
Unlawful detainer
A legal action that puts a tenant on notice to pay past due rent or move out
