Chapter 17 Flashcards
A business tenant pays for its own utilities and makes one payment each month to the landlord, who pays the taxes, insurance on the building, and maintenance. What type of lease arrangement is this?
a. Net
b. Gross
c. Percentage
d. Graduated
b. Gross
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b. The one-lump sum every month to the landlord is a gross lease. In a net lease, the tenant is responsible for paying all or most of the property charges. Percentage leases are generally used by retail establishments and are based on gross sales.
Some tenants want to buy the house they are renting, but they do not have enough money for the down payment. The landlord agreed to put part of the tenants’ rent toward the purchase price. The landlord and tenants have agreed to
a. a lease purchase.
b. a sale leaseback.
c. a ground lease.
d. an option.
a. a lease purchase.
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a. The tenant typically pays a higher rent with a portion being applied to the subsequent purchase of the property. It differs from a sale leaseback, whereby the owner of the property wants to obtain equity from the building. The owner sells the building and agrees to rent it back.
The expiration date of a one-year lease is September 30. On July 1, the house is sold to a family that wants to live in the property. Assuming the lease does not include a sale clause, how soon can the family move in?
a. July 1, present year
b. July 1, next year
c. October 1, present year
d. December 31, present year
c. October 1, present year
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The tenants have the right to possess the property until the end of the lease. The new owners will have to wait to move in.
A tenant rents an apartment under a one-year written lease. The expiration date of the lease is May 1. How much notice must the landlord give the tenant to recover possession when the lease expires?
a. One week
b. 30 days
c. 60 days
d. None
d. None
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This lease will be terminated May 1—an estate for years. By definition, no notice is required. If the tenant or landlord wants notice, a paragraph requiring that notice of intention to terminate be given must be added to the lease.
Two years ago, a landlord rented a parcel of property to a tenant. The agreement stated only that the tenant agreed to pay the landlord $500 per month. What type of tenancy does the tenant have?
a. Holdover
b. At sufferance
c. For years
d. Periodic
d. Periodic
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d. Any lease that automatically renews itself is a periodic tenancy. It will continue until either party gives proper notice requesting a change.
A tenant rents an apartment under a two-year written lease. Three months after signing the lease, the tenant is transferred to another country for a year. During this period, the tenant leases the apartment to a friend. The friend mails monthly rent checks to the tenant, who continues to make monthly rental payments to the landlord. In this situation, the friend has a
a. lease.
b. tenancy at will.
c. sublease.
d. periodic tenancy.
c. sublease.
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c. The friend holds a sublease because the tenant has given up possession for some of the portions of the lease. Giving up all of the remaining rights under the lease would be an assignment. In either situation, the original tenant is still responsible for the rental obligation.
Vandals break into an apartment building and destroy the central air-conditioning system. A tenant’s apartment becomes uncomfortably warm. The next day, the tenant sues the landlord for constructive eviction. In this situation, will the tenant win?
a. Yes, if the tenant’s lease promises that the apartment will be air conditioned.
b. Yes, to claim constructive eviction, it is not necessary that the condition be the result of the landlord’s personal actions.
c. No, to claim constructive eviction, the tenant must prove that the premises are uninhabitable.
d. No, the premises are not unusable, the condition was not due to the landlord’s conscious neglect, and the tenant has not abandoned the apartment.
d. No, the premises are not unusable, the condition was not due to the landlord’s conscious neglect, and the tenant has not abandoned the apartment.
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d. Constructive eviction is a result of the landlord not providing essential services that render the premises unsafe or uninhabitable, conditions that are not met in this situation.
In August, a tenant signs a one-year lease in an apartment complex and moves in. Rent payments are due on the 15th of each month. On December 12, the apartment complex is sold to a new owner. On March 14, the building burns. Which of these statements accurately describes the tenant’s obligations?
a. The tenant is not required to continue paying rent after March 14 because the premises have been destroyed.
b. The tenant is not required to continue paying rent after December 12 because the sale voids the preexisting lease.
c. The tenant is required to continue paying rent for the full lease term because a tenancy for years cannot be terminated by the destruction of the premises.
d. The tenant is required to continue paying rent, but the residential lease is converted by law into a ground lease.
a. The tenant is not required to continue paying rent after March 14 because the premises have been destroyed.
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a. Typically, if a residential rental unit is destroyed, the lease is terminated. This is not the case with agricultural land or ground leases.
Tenant C signs a lease to rent an apartment. The lease runs from October 1 until November 1 of the following year. Tenant Esigns a two-year lease to rent an apartment in a different, new building that will be ready for occupancy in 15 months. Which of these leases must be in writing to satisfy the statute of frauds?
a. Tenant C’s only
b. Tenant E’s only
c. Both C’s and E’s
d. Neither C’s nor E’s
c. Both C’s and E’s
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c. Both leases are covered by the statute of frauds because they will both terminate more than one year from the date they are executed.
A tenant signed a one-year lease with a landlord on April 10. On the following March 1, the landlord asked the tenant whether the lease would be renewed. The tenant did not respond but was still in the apartment on April 11. What can the landlord do?
a. The landlord must initiate eviction proceedings within the first one-month rental period.
b. The landlord cannot evict the tenant; because the tenant remained in possession of the premises, the lease has been automatically renewed for an additional year.
c. If the tenant offers a rent check, the landlord must accept it and the tenant is entitled to a renewal of the one-year lease.
d. The landlord may either evict the holdover tenant or accept a rent check, creating a holdover or periodic tenancy.
d. The landlord may either evict the holdover tenant or accept a rent check, creating a holdover or periodic tenancy.
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d. The original lease was an estate for years and no notice was required to terminate. If the tenant does not pay rent, it will become a tenancy at sufferance. If the tenant pays rent and the landlord accepts it, it will be a holdover or periodic tenancy, which could be changed into an estate for years if they enter into yet another year-long lease.
If a tenant remains in possession of leased property after the expiration of the lease term, without paying rent and without the landlord’s consent, what is the tenant’s status?
a. Tenant at will
b. Trespasser
c. Periodic tenant
d. Freehold tenant
b. Trespasser
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b. The landlord can treat the tenant as a trespasser and proceed with eviction and a suit for damages; however, the landlord must comply with notice to quit requirements.
Because of a physical disability, it would be necessary for a prospective tenant to have all the doorknobs in a rental unit replaced with lever-type handles. In this case, which of these statements is TRUE?
a. The Fair Housing Act requires that the landlord make the accommodation for the tenant at the landlord’s expense; no additional rent may be charged for the modified unit.
b. The landlord is legally obligated to permit the modifications to be made at the tenant’s expense.
c. Because the modifications demanded by the tenant are not reasonable, the landlord is not legally required to permit them.
d. Because the proposed modifications would interfere with a future tenant’s use of the premises, the landlord may refuse to permit them.
b. The landlord is legally obligated to permit the modifications to be made at the tenant’s expense.
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b. These modifications would appear to be within the scope of “reasonable” modifications. They “also would not interfere with a future tenant’s use of the property.”
A small business rents space in a shopping center. Under the terms of the lease, the landlord pays all operating expenses. The business pays a base rent of $1,000 per month, plus 15% of monthly gross profits over $10,000. The business has a
a. gross lease.
b. percentage lease.
c. net lease.
d. variable lease.
b. percentage lease.
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b. Many retail shopping centers use percentage leases. Part of the tenant’s success is due to location. Landlords will help with promotional events to draw in customers knowing that the more successful the tenant, the more rent for the landlord.
When a landowner leases unimproved land to a tenant, who agrees to erect a building on the land, the lease is usually called
a. a lease purchase.
b. a gross lease.
c. a ground lease.
d. an improvement lease.
c. a ground lease.
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c. A tenant who intends to construct a building on leased land generally does so under a ground lease, often for up to 50 years. The tenant may record the lease to serve constructive notice of their long-term interest.
A tenant rented a house, but during the lease term, the tenant moved out of the state without telling the landlord. The tenant assigned the lease to a friend, who failed to make any rental payments. In this situation, which of these statements is TRUE?
a. The tenant has no obligation to the landlord because the lease was assigned, not sublet.
b. The friend has no obligation to the landlord because the friend’s lease agreement is with the original tenant.
c. The tenant is still liable to the landlord for the outstanding rent because the landlord did not release the tenant when the lease was assigned to the friend.
d. The tenant is still liable to the landlord because the tenant’s arrangement with the friend is a sublease, not an assignment.
c. The tenant is still liable to the landlord for the outstanding rent because the landlord did not release the tenant when the lease was assigned to the friend.
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While rights to possession may be assigned or sublet, the obligation to pay rent may not be assigned to another party unless the landlord agrees to the plan.
