Chapter 17: Leases and Property Management Flashcards
What’s the difference between a lessor and lessee?
- Lessor is the owner who provides the lease
2. Lessee is the tenant who resides in the property
The Lessor contains ___________________ interest
reversionary
What does demise mean?
To convey by lease
What are the qualifications for a valid lease?
- Competent parties
- Offer and acceptance
- Consideration
- Legal objetive
Statue of Frauds say lease must be?
In writing if less than 1 year
Who’s signature must be in writing on a lease?
The lessor
What is a restrictive covenant?
Covenant within lease that restricts the lessee’s use of the premises
What is protective covenant?
Covenant within lease that protects the tenant
Ex. Not allowing lessor to lease to other company competitors?
Leases should have a definite
Term (start and end time)
Where are security deposits from leasee placed?
In escow
To get rid of a holdover tenant, one must seek an
ejectment
What is caveat emptor
- Buyer Beware
2. Buyer gets what they get, even if it has major flaws
According to caveat emptor, is the landlord required to make repairs on leasee’s property?
No, but states are requiring a residential lessor to maintain units and make repairs
The tenant also does not have to make repairs, but must restore it back to its original condition
What’s the difference between a lessee assigning a lease versus a leasee being a sublease?
Assign: A tenant transfers all of his leasehold interest
Sublease: a contract under which a tenant rents out their apartment to another individual while .
What is a sandwich lease?
a lease agreement in which a party leases a property from an agent who is, in turn, leasing the property from the owner.
Residential leases can be terminated by destruction or property when?
Residential leases are terminated by the destruction of land or land improvements.
Leases involving agriculture do not release tenant from responsibility to pay rent
How can a lease be terminated?
- There is a breach
- Mutually agree
Lease agreements do not terminate by death of the owner.
If lease is in an estate of years or periodic, it does not terminate by death of tenants
What is a suit of possession?
When owner needs to regain possession of property. Also called an eviction.
How long does owner have to request a suit by partition?
5 days or 10 days depending on location
What is constructive eviction?
Lease can be terminated if tenant can prove the place is uninhabitable.
What are the 7 different types of leases?
- Gross:
- Tenant pays fixed rental or flat fee
- Owner pays taxes, insurance, mortg. pymts, & repairs - Graduated (Step up): Allows rental increases for specific periods of time
- Index Lease: Rent is adjusted based on changes in a designated index such as the CPI (Consumer Price Index)
What is an escalator clause or participation clause?
Allows lessor to apply taxes or insurance to tenants rent
What is a reappraisal lease?
Rent is varied based off of changes in the market
Property must be reappraised at specific times/intervals.
What is a net lease?
a type of lease where the tenant pays a portion or all of the taxes, insurance fees, and maintenance costs for a property
What is a percentage lease?
a lease that says rentals are based on the percentage of the gross or net income received by the tenant
What is a ground lease?
A long-term lease of undeveloped land (usually 50 years or more)
