Leases Flashcards
contract between the lessor (the owner of real estate, also called the landlord) and the lessee (the tenant) that transfers possession and use of the property, lasts for a specified period, and is made in return for consideration (possession and payment).
Lease
requires that leases for more than one year be in writing to be enforceable
Statute of frauds
may be created when a tenant with an estate for years stays on after the lease term expires and the landlord accepts rent payment.
holdover tenancy
continues for a definite period
Estate for years (tenancy for years)
no specific expiration date, but rent is payable at definite intervals and the lease term has continuity because it automatically renews.
estate from period to period
common form of residential lease.
month to month tenancy
no specified initial term, is created by express agreement or operation of law, and can be terminated by the landlord or the tenant at any time on proper notice.
estate at will (tenancy at will)
created when the tenant stays on without the landlord’s consent after termination. The landlord’s acceptance of rent creates a holdover tenancy, or the landlord can treat the tenant as a trespasser and begin eviction proceedings and an action for damages under state law.
estate at sufferance (tenancy at sufferance)
A valid lease requires
Capacity to contract, Legal objective, Offer and Acceptance, and valid Consideration (CLOAC)
Included in the lease
Description of Premise Covenant of quiet enjoyment Non disturbance clause Limitations of use Term Length Security Deposit Improvement allowance
An option may give the tenant the right to
Renew the lease
Purchase the property
Right of first refusal
requires the tenant to pay rent and the landlord to pay the expenses of ownership, such as taxes, insurance, and maintenance.
Gross lease
requires the tenant to pay rent plus all or most property expenses, with the landlord also paying some property expenses.
Net Lease
the tenant pays rent plus a percentage of gross sales and may pay property expenses.
Percentage lease
allows an increase in rent during the lease period.
variable lease
states specific rent increases
graduated lease
allows rent changes (up or down) based on the consumer price index or other indicator.
Index lease
involves separate ownership of land and buildings.
ground lease
allows exploration for and removal of oil and gas.
oil and gas lease
part of the rent may be applied to the purchase price
lease purchase
allows the original owner to use the property as a tenant while freeing up capital for other business purposes.
sale and leaseback
What would automatically terminate a residential lease?
Destruction of property
An estate for years is a leasehold estate that
continues for a definite period.
A tenancy is which the tenant continues in possession after the lease has expired, without the landlord’s permission is
an estate at sufferance
What must a landlord do before commencing a lawsuit for actual eviction?
Serve notice on the tenant
In what field are ground leases most often used?
Commercial development
A business owner operates a small store in a shopping center. Under the terms of the lease, the landlord pays all operating expenses. The tenant pays a base rent of $1,000 per month, plus 15% of monthly gross profits over $10,000. The tenant has
percentage lease
Use restrictions are particularly common in leases for
stores or commercial space.
Who owns the building that is erected on land that has a ground lease?
lessee
A lease agreement that contains language that permits a new landlord to terminate existing leases is
permmissable and enforceable
The federal Fair Housing Act is administered by
Department of Housing and Urban Development
In the absence of clear limitations in the lease as to the use of the premises,
a lessee may use the premises for any lawful purpose.
Which transaction is BEST described as involving a ground lease?
A landlord charges a commercial tenant separate amounts for the land and the leased building.
The lease that provides for the tenant to pay the LEAST amount of expenses other than rent is
Gross lease
