Chapter 6 Lease and the Landlord-Tenant Relationship

Question 1

What are the new owner’s obligations to valid leases when a property is sold?

Answer 1

The new owner assumes the role of landlord with respect to existing leases.

Question 2

Under common law, who has the responsibility and liability for making leasehold repairs needed due to causes other than normal wear and tear?

Answer 2

The tenant

Question 3

What specific lease clause gives the tenant exclusive possession and control of the leased premises?

a. covenant of possession
b. warranty of habitability
c. covenant of quiet enjoyment
d. common law

Answer 3

a. covenant of possession

Question 4

Which of the following is TRUE about the covenant of quiet enjoyment?

a. it is an assurance that surrounding noise levels will be below a determined decibel level
b. it is a promise from the landlord to make repairs when sound is disturbing surrounding tenants
c. it is a guarantee that the tenants will have peaceful possession of the property
d. it is a prevention of foreclosure on a property that is currently being leased.

Answer 4

c. it is a guarantee that the tenants will have peaceful possession of the property

Question 5

Which of the following is a defense for nonpayment of rent or as a justification for termination of a lease?

a. abatement of rent
b. tenant’s cure rights
c. constructive eviction
d. reformation lawsuit

Answer 5

c. constructive eviction

Question 6

Explain the covenant of possession.

Answer 6

gives the tenant exclusive possession and control of the leased premises.

Landlord cannot enter the property unless the landlord reserves specific entry rights in the lease.

Question 7

What is rent?

Answer 7

payment to the landlord by the tenant to occupy the leased premises

Question 8

What is CPI used to measure?

a. property maintenance costs
b. average real estate prices
c. housing market fluctuation
d. cost of living increases

Answer 8

d. cost of living increases

Question 9

What is the purpose of a work letter?

Answer 9

A letter detailing tenant improvements-describes work to be done, who will pay, when it will begin and end, etc.

Question 10

When a tenant at Bright Manor defaulted on rent, the landlord considered entering the tenant’s property to seize it’s goods and hold them for sale to offset the unpaid rent. he decided not to, however, when his lawyer told him that the remedy ________ had been abolished in his state.

a. distress for rent
b. breach of lease
c. survival
d. evocation

Answer 10

a. distress for rent

Question 11

In a net lease, the tenant pays

a. a fixed rent alone
b. a graduated rent
c. base rent plus expenses
d. a percentage rent alone

Answer 11

c. base rent plus expenses

Question 12

When does the legal constructive eviction usually occur?

Answer 12

After the tenant has vacated the leased premises

Question 13

If a landlord sells property that is subject to valid leases, the ______ takes the property subject to those leases and the rights of the tenants under the leases.

a. purchaser
b. bank
c. mortgagee
d. agent

Answer 13

a. purchaser

Question 14

What is the survival clause?

Answer 14

a lease term that converts the tenant’s rent obligations into an obligation to pay damages due to the tenant’s breach, thus allowing the landlord to continue to collect rent as damages after a breach.

Question 15

What is distraint and distress for rent?

Answer 15

A common law right of the landlord to enter the tenant’s property, seize the tenant’s goods and hold them for public sale to offset unpaid rent. Most states have abolished the right

Question 16

Which covenant in the landlord-tenant relationship assures the tenant freedom from interference from acts and claims of third parties?

Answer 16

The covenant of quiet enjoyment

Question 17

Usually, what effect does a sublease have on the original tenant’s obligation to the landlord?

Answer 17

It does not change the original tenant’s obligation to the landlord

Question 18

Which of the following is NOT typically addressed by a lease?

a. rent
b. appearance of property grounds
c. term of possession
d. use of premises

Answer 18

b. appearance of property grounds

Question 19

What approaches are typically used to increase rent in a long term lease?

Answer 19

Adjusting the rent to Consumer Price Index (CPI).

Question 20

Joe’s landlord refused to provide adequate heat or hot water during the cold water during the cold winter. For health reasons, Joe abandoned the apartment and was not obligated to pay the rent. this was an example of ______ as it pertained to his lease.

a. warranty of fitness
b. constructive eviction
c. warranty of habitability
d. breach of lease

Answer 20

b. constructive eviction

Question 21

The terms in Woody’s Furniture Inc.’s lease restricts the kinds of operations it may undertake within its leased premises. These terms were written into a(n):

a. waiver
b. subrogation
c. privity of contract
d. use clause

Answer 21

d. use clause

Question 22

Which is NOT a common method of pass through for a tenant?

a. tenant assumes between 50-70% of the increases in operating expenses over the first year of a lease
b. tenant assumes the cost of operating expenses in excess of a stated dollar amount
c. tenant assumes any increase in operating cost over a based year
d. tenant is not required to assume any increases in operating expenses

Answer 22

a. tenant assumes between 50-70% of the increases in operating expenses over the first year of a lease

Question 23

Which of the following is NOT typically found in a work letter?

a. who bears the cost of the work
b. who conducts the work
c. when work will begin
d. technical details of the work

Answer 23

d. technical details of the work

Question 24

Under common law, when is the tenant NOT responsible for leasehold repairs?

a. when damage is the tenant’s fault
b. when the repairs have been prescheduled
c. when the damage is caused by normal wear and tear
d. when repairs are necessary to continue to use the property

Answer 24

c. when the damage is caused by normal wear and tear

Question 25

Performance Systems Incorporated, which also operates its business using the acronym PSI, lease a warehouse from Elixir Properties LLC. To ensure legal legitimacy, what name must appear for PSI on the lease?

a. PSI Inc., as this is their DBA name
b. PSI, as this is their DBA name
c. Performance Systems Corporation
d. Performance System Incorporated, the proper name of the corporation

Answer 25

d. Performance System Incorporated, the proper name of the corporation

Question 26

What is an expense stop?

Answer 26

The dollar amount at which a tenant becomes responsible for operating expenses

Question 27

What is a constructive eviction?

Answer 27

A landlord’s deprivation of the tenant’s use and enjoyment of the leased premises, causing the tenant to abandon or surrender the premises. The tenant’s obligation to pay rent ceases after moving out.

Question 28

What is a lease?

Answer 28

an agreement between a tenant and a landlord governing the terms of their relationship