Chapter 18 Leases Flashcards
lease
between a lessor (landlord) and lessee (tenant).
transfers the lessor’s rights to exclusive possession and use of the property to the tenant for a specified period of time and establishes the consideration the lessee is to pay Rent for the use of the property
leasehold estate
a tenant’s right to posess RE for the term of the lease.
It is considered personal property.
Estate for Years
a tenancy for years is a leasehold estate that continues for a definite period. always has a specific starting and ending dates.
An estate from period to period
is created when the landlord and tenant enter into an agreement for an indefinite time. does not contain specific expiration date.
month to month
when a tenant takes posession with not definite termination date and pays monthly rent
holdover tenancy
is created when an estate for years remains in possession or Holds over after the lease term expires.
Estate at Will
give the tenant the right to possess property with the landlord’s consent for an unspecified or uncertain term.
Estate at Sufferance
arises when a tenant who lawfully took possession of real property continues in possession of the premises without the landlords’ consent after the right of possession has expired.
notice to quit
start of an eviction notice
Requirements of a vaild lease
Capacity to contract-be of legal and and sound mind.
Legal objective- lease must be legal
Offer and acceptance- mutually agree on all terms of contract
Consideration-$ in exchange for promises
covenant of quiet enjoyment
the lessee can occupy the premises without interference for the owner or anyone else
Security Deposit
held by the landlord during the lease term.
assignment
of a lease the tenant transfers the entire leasehold interest to another person.
Sublease
a tenant transfers less than the entire leasehold interest by subletting the premises to a new tenant.
Sandwich lease
the lease a sublessor’s contract with the new sublessee
nondisturbance clause
is included in the financing instrument used to mortgage lease premises.
Renewal option
grants the lessee the privilege of renewing the lease
purchase option
gives the tenant the right to purchase the property at a predetermined price within a certain period possibly the lease term.
right of first refusal
allows the tenant the opportunity to buy the property before the owner accepts an offer from another party.
Gross Lease
the tenant pays a fixed rent and some or all of the utility expenses, while the landlord pays all the taxes, insurance, repairs, and other utility expenses and maintenance connected with the property.
Net Lease
tenant pays all or most of the property expenses, such as hazard insurance, property taxes, and common area maintenance charges in addition to the rent.
Percentage leases
generally used for retail businesses. the rent is based on a minimum fixed rental fee plus a percentage of the gross income received by te tenant doing business on the leased property.
variable lease
allows for increases in the rental charges during the lease term.
Graduated lease- provides for specified rent increases at set future dates
Index lease- allows rent to be increased or decreased periodically based on changes in the consumer price index or some other indicator
Ground lease
leased unimproved land that a tenant builds on and leases from the landowner
Oil and Gas Lease
when oil companies leases land to explore for oil and gas, a special lease agreement must be negotiated.
lease purchase
used when a tenant wants to purchase the property but is not yet able to do so.
sale and leaseback
the property owners sell the property and then lease it back for an agreed period and rental.
breach of lease
when a tenant violates any lease provision. the landlord may sue the tenant to obtain a judgment to cover past due rent, damages to the premises, or other defaults
suit for possession-actual eviction
When a tenant breaches a lease or improperly retains leased premises, the landlord may regain possession through a legal process known as actual eviction
Constructive Eviction
if a leased premises becomes unusable for the purpose stated in the lease, the tenant may have the right to abandon them. and terminates the lease agreement
