Chapter 18 - Leases

Question 1

Assignment

Answer 1

One party (assignor) transferring rights or interests under a contract to another person (assignee)

Question 2

Covenant of Quiet Enjoyment

Answer 2

Guarantee that a buyer or tenant has the right to exclusive, undisturbed possession of a leasehold estate and will not be disturbed by the previous owner, lessor, or anyone else claiming interest in the property

Question 3

Estate at Will

Answer 3

A leasehold estate with no specified termination date and with no regular rental period.

Question 4

Estate for Years

Answer 4

A leasehold estate set to last for a specific period, after which it automatically terminates. Also called term tenancy.

Question 5

Graduated Lease

Answer 5

A lease in which the rent changes throughout the lease term. The contract specifies how much as well as when the rent will change.

Question 6

Gross Lease

Answer 6

A lease in which the lessor pays all operating and maintenance costs associated with the property

Question 7

Ground Lease

Answer 7

A lease in which a tenant leases unimproved land on a long-term basis and typically includes a provision that provides the tenant will construct a building on the property, which he will own upon completion. The lessor retains the rights to the land. Essentially, ownership of the land and improvements (building) are separated. Also called land lease

Question 8

Holdover Tenant

Answer 8

A lessee who remains in possession of property after the lease has expired; a tenant who refuses to surrender possession of property at the tenancy’s end.

Question 9

Index Lease

Answer 9

Method used to determine rent for long-term leases.

Question 10

Lease

Answer 10

A contract where one party pays the other rent in exchange for possession of real estate; a conveyance of a leasehold estate from the fee owner to a tenant.

Question 11

Leasehold Estate

Answer 11

An interest that gives the holder a temporary right to possession of the estate without title.

Question 12

Lessee

Answer 12

Person who leases property; a tenant

Question 13

Lessor

Answer 13

Person who leases property to another; a landlord.

Question 14

Net Lease

Answer 14

Lease for which a tenant pays all taxes, insurance, etc., plus utilities and rent

Question 15

Percentage Lease

Answer 15

Lease under which a tenant pays a percentage of gross sales in addition to rent

Question 16

Periodic Estate

Answer 16

A leasehold estate that continues for successive equal periods of length until terminated by proper notice from either the lessor or the lessee.

Question 17

Security Deposit

Answer 17

Money a tenant gives a landlord at the beginning of tenancy to ensure the tenant will comply with the terms of the lease. The landlord may retain all or part of the deposit to cover unpaid rent, repair costs, or other damages, if necessary

Question 18

Sublease

Answer 18

When a tenant transfers only part of his right of possession or other interest in leased property to another person for part of the remaining lease term. Compare: assignment

Question 19

Tenancy at Sufferance

Answer 19

Possession of property by a holdover tenant