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WY Real Eatate > Chapter 7 - Real Estate Leases > Flashcards

Chapter 7 - Real Estate Leases Flashcards

1
Q

One of the aims of the Uniform Residential Landlord and Tenant Act is to

A

discourage the use of unfair and overly complex leases

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2
Q

A primary theme of the Uniform Residential Landlord and Tenant Act is that both landlord and tenant

A

bargain with each other in good faith

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3
Q

In accordance with Statute of Frauds

A

a five-year lease must be in writing to be enforceable

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4
Q

What happens when a leased property is sold

A

the buyer acquires title subject to the lease

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5
Q

If a lease does not state a specific ending date, when does it terminate?

A

when either party gives proper notice

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6
Q

A lease is both

A

an instrument of conveyance and a contract between principal parties to uphold certain covenants and obligations

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7
Q

The four principal types of leasehold estate are:

A

 estate for years: has a specific lease term
 estate from period-to-period: the lease term automatically renews
 estate at will: has no specified lease term
 estate at sufferance: a tenancy without consent

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8
Q

The legal essence of a valid lease is that it

A

conveys an exclusive right to use and occupy a property for a limited period of time in exchange for rent and the return of the property after the lease term is over.

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9
Q

A lease conveys a leasehold interest or estate that grants the tenant the following rights during the lease term:

A

 exclusive possession and occupancy
 exclusive use
 quiet enjoyment
 profits from use

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10
Q

The lease defines the tenant’s obligations, which principally are to:

A

 pay the rent on time
 maintain the property’s condition
 comply with the rules and regulations of the building

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11
Q

In conveying the leasehold estate, the landlord acquires a leased fee estate, which entails the rights to:

A

 receive rent
 re-possess the property following the lease term
 monitor the tenant’s obligations to maintain the premises

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12
Q

The lease defines the landlord’s obligations, which principally are to:

A

 provide the necessary building support and services
 maintain the condition of the property

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13
Q

A valid lease creates obligations that survive the death of the landlord or tenant, with certain exceptions

A

A tenant’s estate remains liable for payment of rent if the tenant dies; the landlord’s estate remains bound to provide occupancy despite the landlord’s death

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14
Q

The landlord may sell, assign, or mortgage the leased fee interest. However,

A

transferring and encumbering the leased property do not extinguish the obligations and covenants of a lease. Buyers and creditors, therefore, must take their respective interests subject to the terms of the lease.

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15
Q

State contract laws determine the requirements for a valid lease. These laws generally require the following conditions.

A

-Parties
-property description
-exclusive possession
-legal and permitted use
-consideration
-offer and acceptance
-signatures
-oral us written from

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16
Q

Lease contract requirements: Parties

A

The principal parties must be legally able to enter into the agreement; i.e., meet certain age, sanity, and other requirements.

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17
Q

Lease contract requirements: property description

A

The lease must identify the property by legal description or other locally accepted reference.

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18
Q

Lease contract requirements: Exclusive possession.

A

The landlord must provide an irrevocable right to exclusive possession during the lease term, provided the tenant meets all obligations.

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19
Q

Lease contract requirements: Legal and permitted use.

A

The intended use of the property must be legal. A use that is legal but not permitted does not invalidate the lease but constitutes grounds for default.

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20
Q

Lease contract requirements: Consideration.

A

The lease contract must be accompanied by consideration to the landlord for the rights conveyed. How the consideration is paid does not affect the lease’s validity, so long as the parties comply with the terms of the lease.

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21
Q

Lease contract requirements: Offer and acceptance.

A

The parties must accept the lease, and communicate their acceptance to the other party, for the lease to take legal effect.

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22
Q

Lease contract requirements: Signatures.

A

The landlord must sign the lease to convey the leasehold interest. A tenant need not sign the lease, although it is prudent to do so in order to enforce the terms of the lease

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23
Q

Lease contract requirements: Oral versus written form.

A

Generally, a lease for a period exceeding one year cannot be oral but must be in writing to be enforceable because of the Statute of Frauds.

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24
Q

The clauses of a lease define

A

he contractual relationship between landlord and tenant

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25
Q

The most important and basic clauses in a lease are

A

-Rent and security deposit.
-Lease term.
-Repairs and maintenance.
-Subletting and assignment.
-Rules and regulations.
-Improvements and alterations.
-Options
-Damage and destruction.

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26
Q

A rent clause stipulates

A

the time, place, manner and amount of rent payment. It defines any grace period that is allowed, and states the penalties for delinquency.

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27
Q

In the absence of an explicit term with beginning and ending date, a court will

A

generally construe the lease to be a tenancy at will, cancelable upon proper notice.

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28
Q

Repairs and maintenance provisions define

A

the landlord’s and tenant’s respective responsibilities for property repairs and maintenance.

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29
Q

A tenant must abide by all usage

A

restrictions imposed by the lease’s rules and regulations for the property. These rules aim to protect the property’s condition as well as the rights of other tenants.

30
Q

An improvements and alterations clause therefore identifies

A

necessary permissions and procedures, and who owns improvements

31
Q

An option clause offers a tenant

A

the opportunity to choose a course of action at some time in the future under certain terms. Typical options are the right to renew the lease, buy the property, and lease additional adjacent space

32
Q

A damage and destruction provision defines

A

the rights and obligations of the parties in the event the leased premises are damaged or destroyed.

33
Q

A gross lease

A

or full service lease, requires the landlord to pay the property’s operating expenses, including utilities, repairs, and maintenance, while the tenant pays only rent.

34
Q

A net lease requires a tenant to

A

pay for utilities, internal repairs, and a proportionate share of taxes, insurance, and operating expenses in addition to rent.

35
Q

A percentage lease allows the landlord

A

to share in the income generated from the use of the property. A tenant pays percentage rent, or an amount of rent equal to a percentage of the tenant’s periodic gross sales

36
Q

The percentage rent may be:

A

 a fixed percent of gross revenue without a minimum rent
 a fixed minimum rent plus an additional percent of gross sales
 a percentage rent or minimum rent, whichever is greater

Percentage leases are used only for retail properties.

37
Q

A residential lease may be

A

a net lease or a gross lease. Usually, it is a form of gross lease in which the landlord pays all property expenses except the tenant’s utilities and water

38
Q

Residential leases differ from commercial and other types of lease in that

A

 lease terms are shorter, typically one or two years
 lease clauses are fairly standard from one property to the next, in order to reflect compliance with local landlord-tenant relations laws
 lease clauses are generally not negotiable, particularly in larger apartment complexes where owners want uniform leases for all residents

39
Q

A commercial lease may be

A

a net, gross, or percentage lease, if the tenant is a retail business. As a rule, a commercial lease is a significant and complex business proposition. It may involve hundreds of thousands of dollars for improving the property to the tenant’s specifications.

40
Q

Some important features of commercial leases are:

A

 long term, ranging up to 25 years
 require tenant improvements to meet particular usage needs
 virtually all lease clauses are negotiable due to the financial magnitude of the transaction
 default can have serious financial consequences; therefore, lease clauses must express all points of agreement and be very precise

41
Q

A ground lease, or land lease, concerns

A

the land portion of a real property. The owner grants the tenant a leasehold interest in the land only, in exchange for rent.

42
Q

Ground leases are primarily used in three circumstances:

A

 an owner wishes to lease raw land to an agricultural or mining interest
 unimproved property is to be developed and either the owner wants to retain ownership of the land, or the developer or future users of the property do not want to own the land
 the owner of an improved property wishes to sell an interest in the improvements while retaining ownership of the underlying land

43
Q

A proprietary lease conveys

A

a leasehold interest to an owner of a cooperative. The proprietary lease does not stipulate rent, as the rent is equal to the owner’s share of the periodic expenses of the entire cooperative

44
Q

The practice of leasing property rights other than the rights to exclusive occupancy and possession occurs

A

most commonly in the leasing of water rights, air rights, and mineral rights

45
Q

A landlord or tenant who violates any of the terms and covenants of the lease has

A

breached the contract and is in default

46
Q

In the event of a default, the damaged party may pursue court action, including suing for

A

 damages
 cancellation of the lease
 specific performance

47
Q

A successful suit for specific performance compels

A

the defaulting party to perform the contract obligation that was breached

48
Q

Tenant default occurs most commonly from

A

failure to pay rent or maintain the premises

49
Q

The most common form of landlord default is

A

failure to provide services and maintain the property condition.

50
Q

In an instance where the landlord’s negligence or disruptive action has rendered the property unoccupiable, a tenant may vacate the premises and declare that the lease is cancelled by default is called

A

constructive eviction

51
Q

A lease may terminate for any of the following causes.

A

-Breach or default
-term expiration
-notice
-voluntary agreement
-property destruction
-condemnation
-foreclosure
-death of tenant, or landlord, with qualifications
-abandonmnent

52
Q

Causes for lease termination: Breach or default.

A

Breach of contract or default, as previously discussed, may terminate a lease.

53
Q

Causes for lease termination: Term expiration.

A

In a tenancy for years, the lease automatically terminates at the end of the lease term.

54
Q

Causes for lease termination: Notice

A

Proper notice by either party may terminate a periodic leasehold, or a tenancy at will

55
Q

Causes for lease termination: Voluntary agreement.

A

Both parties can agree to terminate a lease at any time.

56
Q

Causes for lease termination: Property destruction.

A

Destruction of the property is grounds for terminating lease obligations.

57
Q

Causes for lease termination: Condemnation.

A

A taking by eminent domain proceedings generally terminates a lease.

58
Q

Causes for lease termination: Foreclosure.

A

A foreclosure extinguishes all prior interests in a property, including a leasehold.

59
Q

Causes for lease termination: Death of tenant or landlord, with qualifications.

A

A lease for tenancy at will terminates on the death of either landlord or tenant. A lease also terminates on the death of the landlord if the landlord held a life estate interest in the property, since the landlord could not have conveyed an interest that extended beyond his or her own interest.

60
Q

Causes for lease termination: Abandonment.

A

If a tenant abandons a leased property and demonstrates no intention of fulfilling the obligations of the lease, the landlord may re-take possession and pursue legal recourses for default.

61
Q

It is important to note that vacating leased premises does not

A

in itself constitute abandonment, and certainly not if the tenant continues to abide by the lease obligations.

62
Q

Uniform Residential Landlord and Tenant Act (URLTA) is a

A

model law enacted as a blueprint for state laws to regulate leasing and management practices of landlords with residential properties.

63
Q

Uniform Residential Landlord and Tenant Act (URLTA) aims to:

A

 equalize and standardize rights of landlord and tenant
 protect tenants from unethical practices
 prevent unfair, complex leases and their enforceability

64
Q

One important effect of URLTA is that it prompted legislation

A

at the state level that empowered the courts to nullify residential leases that violated URLTA guidelines, particularly where a lease gave unfair advantage to the landlord

65
Q

URLTA legislation primarily addresses

A

the lease contract, deposits and advances, obligations of landlord and tenant, the landlord’s rights of access, and standards for eviction

66
Q

Lease agreements. URLTA sets standards for improving oral, vague, or unbalanced lease agreements. The law’s positions on these issues are

A

 unclear lease term: becomes a periodic tenancy
 rent amount: fair market value or court’s opinion
 waiving of rights: certain rights cannot be waived

67
Q

Deposit and advance. URLTA requires leases to be clear about:

A

 maximum deposit amount
 the tenant’s right to earn interest on the deposit
 commingling deposit or advance with other monies
 deadline for returning deposits
 procedures and criteria for return of the deposit to the tenant

68
Q

Landlord’s obligations. Under URLTA, a landlord must:

A

 bargain in good faith with the tenant
 provide required maintenance
 make repairs
 comply with local building codes
 provide access and safety services: elevator; fire escapes, etc.
 provide a procedure for delivery of official notices

69
Q

Tenant’s obligations. A tenant must

A

 bargain in good faith
 maintain the condition of the leased premises
 abide by (legitimate) rules and regulations of the building
 refrain from abusing or causing destruction to the property
 limit uses to those approved
 avoid unduly disturbing other tenants

70
Q

Access. URLTA attempts to balance

A

the landlord’s right to access the premises with the tenant’s right of quiet enjoyment

71
Q

Default and eviction. URLTA attempts to establish

A

equitable procedures for dealing with lease defaults.

72
Q

Exemptions. State laws based on URLTA generally do not apply to

A

transient occupancies, such as hotel and motel rentals, proprietary leases in cooperatives, or to occupancy in a residence that is under a contract for deed.

WY Real Eatate (30 decks)

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