Chapter 5 : Leases Flashcards
a lease
a contract to transfer the lessor’s rights to exclusive possession and use the property to the tenant for a specified period
the lease establishes
the length time the contract is to run and the amount the lessee is to pay for use of the property
the lease agreement combines 2 contracts
it is conveyance of an interest in the real estate
it is a contract to pay rent and assume other obligations
the lessor’s interest is called a ..
leased fee estate plus reversionary right
the statute of frauds in Illinois requires that lease agreements be in writing to be enforceable in court if they are more than..
a year
what’s the only lease agreement enforceable In court?
oral leases less than one year in duration
a leasehold
a tenants right to possess real estate for the term of the lease
a leasehold is generally considered
personal property
types of leasehold estates :
Estate for Years
continues for a definite period of time
could be years , months, weeks or even days
no notice is required to terminate because the lease has an expiration date
lessee has the right to use the premises fr the entire lease even when the lessor dies or sale of the property
if both parties agree the state of years can be terminated before expiration
otherwise neither party may terminate without showing that the lease agreement has been breached
types of leasehold estates :
Estate from Period to Period
a periodic tenancy, an agreement for indefinite time
has no expiration date, continues until proper notice of termination Is given
it is automatically renewable under the original terms of the agreement until one of the parties gives notice to terminate
payment and acceptance of rent extend the lease for another period
notice required to terminate periodic tenancy :
tenancy from year to year
at least 60 days written notice within a 4 month period
notice required to terminate periodic tenancy :
Tenancy from month to month
30 day written notice
notice required to terminate periodic tenancy :
tenancy from week to week
7 day written notice
Estate at will
gives the tenant the right to the property with the landlord’s consent
terminates by the death of either the landlord or tenant
estate at sufferance
when a tenant who lawfully continues possessing the premises without the landlord’s consent
known as a holdover
tenant fails to surrender the property after years and after lease expires it continues until eviction is processed
can also happen when a tenant is in breach of lease, is informed but not cured the breach
landlord can consider estate at sufferance as being willful withholding of possessions and can charge double the rent
lease application : leasing forms should be saved even if the tenant does not lease as they can…
provide written evidence that the manager isn’t illegally discriminating
residential lease includes acknowledgment from the tenant that the landlord may verify all information found on the application
rental history along with court and criminal records
evaluation of data : identity
must provide some form of identification, rental history, financial status, several references
landlords can check
credit scores
criminal history
Evaluation of data : rental history
manager should seek a family or company that will stay for a long time
financial status
a tenant with a history of erratic and delinquent payments should be turned down
residential
the manager should require a credit report from every applicant if required of one
credit report
obtained legally only with the applicants consent
many managers charge a non-refundable fee to help defray the costs involved in obtaining a credit report
a number of companies specialize in searching public records on behalf of the owner or property manager includes
past rental performance
nationwide credit reports
outstanding check reports
criminal history reports
rentak performance histories contain
past evictions
past due balances
noise complaints
insufficient funds checks
damages to the rental unit
requirements of a valid lease
capacity to contract
legal objectives
offer and acceptance
consideration
labor performed on the property could be
valid consideration the same as rent
changes to the lease need to be
in writing
use of premises
use restrictions in common leases for stores or commercial space
Ex) a real estate office is to be an office only, not any other purpose
security deposit : if the tenant defaults on payment of rent or destroys the premises
the lessor may keep all r part of the deposit to compensate for the loss
security deposit : landlords who receive a security deposit on properties containing five or more units may not…
withhold any part of the security deposit unless they give the tenant an itemized statement listing alleged damage
security deposit : if the landlord doesn’t return the security deposit within 45 days of vacancy can be..
taken to court and if found unfaithful then they must pay the tenant double the security deposit amount, plus court costs and attorney fees
residential leases of units in properties of 25 or more units and
held for more than sx months are required to pay the interest from the date of the deposit
improvements : true or false
neither the landlord nor the tenant is required to make any improvements to the leased property
true
improvements : the tenant may make improvement only with
the landlord’s permission
accessibility : yes or no?
are tenants with disabilities permitted to make reasonable modifications to a property
yes but at their own expense and if it interferes with future tenant use then its required that the premises be restored to their original condition
Maintenance of premises : what does maintain the dwelling unites a habitable condition mean?
landlords must make any necessary repairs to common areas such as hallways, stairs, and elevators and maintain safety features such as fire sprinklers and smoke alarms
a landlord an be in violation by failing to provide access to (7)
drinkable and hot water
heat during cold weather
working electricity
a smoke detector
a working bathroom and toilet
removal of rodent or insect infestation
building code violations
a tenant must give the landlord notice of defect and reasonable time to cure it
a remedy a tenant may choose are (3)
move out and terminate the lease if repairs are not made within reasonable time
stay and repair the problem and deduct the costs from the rent but it can not exceed the rent amount
sue for any damages resulting from the defective condition
assignment and subleasing : when a tenant transfers less than all the leasehold interests by leasing them to a new tenant
the original tenant remains responsible for rent being paid by the new tenant and for any damage done to the property
assignment and subleasing are only allowed when
a lease specifically permits them
what’s a sandwich lease
ask Monse
non disturbance clause : mortgage clause
the lender agrees not to terminate the tenancies of lessees who pay their rent should the lender foreclose on the landlord’s building
options on lease : renewal option
grants the lessee the privilege of renewing the lease
options of lease : purchase option
allows the tenant the right to purchase the property at a pre-determined price
options on lease : right of first refusal clause
allows the tenant the opportunity to buy the property before the owner accepts an offer from another party
there are three types of leases
gross lease
net lease
percentage lease
gross lease
tenant pays a fixed rent
landlords pays all taxes, insurance, repairs, utilities, etc
net lease
ask Monse
Percentage Lease
a percentage from the annual gross income received by the tenant ding business on the leased property
Variable lease
several types of leases allow for increases in the base rent during lease periods
graduated lease
provides specific base rent increases at set future dates
index lease
allows base rent to be increased or decreased periodically
Ground lease
ask Monse
a tenant who imply abandons leased property
remains able for the terms of the lease including rent
the lease does not terminate if the parties..
die or if the property is sold
the leas does not terminate unless - life estate
a lease from the owner of a life estate ends when the tenant’s life ends
a lease does not terminate if the parties - tenancy at will
the death of either party terminates a tenancy at will
sale clause
requires that the tenants be given some period of notice before the termination
Breach of lease : when a tenant breaches any lease provision..
the landlord may sue the teat to obtain a judgement to cover past-due rent damages to the premises or other defaults
Five Day Notice - Monetary Breach :
payment of the delinquent rent is due within five days. If the tenant fails to pay the rent the landlord may terminate the lease automatically and sue for possession without further notice
Ten Day Notice - non-monetary Breach:
in cases which the tenant breach is other than non-payment of rent the landlord can serve the tenant with a 10 day notice. After the 10 days the landlord may sue for possession without further noice even if cured
Landlord remedies : Actual Eviction
The landlord must serve notice on the tenant before commencing the lawsuit. When a court issues a judgement for possession to a landlord the tenant must vacate the property. If the tenant refuses to leave, the landlord can get a judgement for a court officer to forcibly remove the tenant and their belongings
Tenant’s Remedies - Constructive Eviction
If a landlord breaches any clause of a lease agreement, the tenant has the right to sue and recover damages against the landlord. If the leased premises become unusable the tenant may have the right o abandon them.
