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Prin II > Leases > Flashcards

Leases Flashcards

1
Q

Which type of leasehold estate is commonly referred to as a periodic tenancy?

A

Estate from period to period

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2
Q

What is an estate at sufferance?

A

This estate is created when a tenant takes legal possession of the property but then remains on the property without the owner’s consent after the lease terminates.

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3
Q

What are a tenant’s primary obligations when leasing a property?

A

Pay the rent on time
Maintain the property’s condition
Comply with the rules and regulations of the building

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4
Q

According to Property Code 92.010, a Texas landlord has the right to set a maximum number of adults age 18 or older in his property. What is that maximum?

A

Three times the number of bedrooms

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5
Q

List three covenants that are common in a lease. (See screen 14 for other correct answers.)

A

Demising clause
Description of the premises
Clear statement of term

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6
Q

What does it mean if there are no limitations on the use of the property written into the lease?

A

If no limitations are written into the lease, the tenant may use the property for any lawful purpose, providing the tenant does not violate any deed restrictions.

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7
Q

Within what timeframe must a landlord refund the security deposit on a residential lease?

A

In Texas, a landlord must refund the security deposit minus any charges for damages within 30 days of surrender of the premises.

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8
Q

What is the monetary limit on what a tenant can deduct from the rent for a repair the tenant made?

A

The deductions for repairs for any month may not exceed one month’s rent or $500, whichever is greater.

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9
Q

What are the most common causes of tenant default?

A

Tenant default occurs most commonly from failure to pay rent or maintain the premises.

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10
Q

What is the most common form of landlord default?

A

The most common form of landlord default is failure to provide services and maintain the property condition.

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11
Q

List three commons causes of a lease termination. (See screen 29 for other correct answers.)

A

Term expiration
Voluntary agreement
Property destruction

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12
Q

What happens to the lease if the tenant dies?

A

The lease does not terminate. It becomes part of the tenant’s estate, which is bound by the terms of the lease.

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13
Q

Define a gross lease.

A

The tenant pays a fixed rent and the owner pays the taxes, insurance and other normal ownership expenses.

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14
Q

With what type of lease does the tenant agree to pay all taxes, insurance, maintenance and repairs?

A

Net-net-net lease (Triple net lease)

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15
Q

What is the Uniform Residential Landlord and Tenant Act (URLTA)?

A

The Uniform Residential Landlord and Tenant Act (URLTA) is a model law enacted as a blueprint for state laws to regulate leasing and management practices of landlords with residential properties.

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16
Q

What must a landlord do under URLTA?

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

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17
Q

Lease

A

both an instrument of conveyance and a contract between principal parties to uphold certain covenants and obligations. As a conveyance, a lease conveys an interest, called the leasehold estate, but does not convey legal title to the property.

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18
Q

Statute of Frauds

A

Generally, a lease for a period exceeding one year must be in writing to be enforceable because of the Statute of Frauds. The Texas Statute of Frauds also requires that the lease be in writing and signed by both parties, the lessor and lessee.

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19
Q

Sex Offenders

A

Texas has no law regarding the disclosure of sex offenders living near the area of the property.

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20
Q

Lead–based paint disclosure

A

applies to leasing situations as well as sales transactions and applies to all properties built prior to 1978

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21
Q

Before signing of a contract for a housing sale or lease:

A

Sellers and landlords must disclose known lead-based paint and lead-based paint hazards and provide available written reports to buyers or renters.
Sellers and landlords must give buyers and renters the pamphlet, developed by EPA, HUD, and the Consumer Product Safety Commission (CSPC), titled “Protect Your Family from Lead in Your Home.”
Notification and disclosure language for the existence of lead paint hazards must be included in sales contracts and leasing agreements.
Sellers, lessors, and real estate agents share responsibility for ensuring compliance.

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22
Q

Fair Housing laws

A

Landlords must understand the fair housing laws, along with what they can say and do when selecting tenants. This includes:

How the landlord advertises a rental
The questions the landlord asks on a rental application or when interviewing potential tenants
The screening fee the landlord charges tenants
How the landlord deals with tenants who rent from him or her

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23
Q

Americans with Disabilities Act

A

deals with public accommodations and services operated by private entities. The Fair Housing Amendments Act applies to the public use areas, the common use areas, and the individual apartments at a housing facility, regardless of whether it is privately or publicly owned.

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24
Q

4 Types of Leasehold Estates

A

Estate for Years
Estate from period to period
Estate at Will
Estate at sufferance

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25
Q

Estate for Years

A

a lease that continues for a definite fixed period of time. The lease can be for specified length of time.

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26
Q

Estate from period to period

A

a month-to-month lease continues from period to period requires proper notice to terminate and has no definite ending date.

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27
Q

Estate at Will

A

there is no time limit on these estates. The possession is given with permission but there is no agreement about rent. It can be terminated by either party at any time with proper notice.

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28
Q

Estate at Sufferance

A

created when a tenant takes legal possession of the property but then remains on the property without the owner’s consent after the lease terminates.

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29
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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30
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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31
Q

In conveying the leasehold estate, the landlord’s rights include:

A

Receive rent
Re-possess the property following the lease term
Monitor the tenant’s obligations to maintain the premises

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32
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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33
Q

Keating Memo

A

states that a reasonable occupancy is two people per bedroom, and an infant less than six months old can sleep in the parent’s bedroom.

34
Q

In Texas, according to Property Code 92.010?

A

the landlord has the right to set a maximum number of adults age 18 or older in his property. Texas law allows the landlord to set that maximum to three times the number of bedrooms.

35
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 versus written form
36
Q

Law of Contracts

A

governs the making, interpretation and enforcement of leases. Therefore the requirements for making a valid lease are the same as for making a valid contract

37
Q

The following are common requirements in many leases:

A 
Capacity to contract
Demising clause
Description of the premises
Clear statement of term
Specification of rent and how it is to be paid
In writing
Signatures
Delivery
Plain language requirement
Use of the premises
Lease renewals
38
Q

A security deposit

A

money that a tenant deposits with the owner of the apartment for the repair of any damages to the apartment for which the tenant is responsible.

39
Q

Repairs and maintenance provisions

A

define the landlords and tenants respective responsibilities for property repairs and maintenance.

40
Q

Can the Tenant Make Repairs?

A

Under certain conditions, a tenant may make repairs to a unit and deduct the cost from the rent.
Max $500

41
Q

repair-and-deduct option

A

allows the tenant to arrange and pay for repairs, then deduct the amount from rent payments. However, Section 92.0561 of the Property Code qualifies how the tenant may do this.

42
Q

Subletting (subleasing)

A

transfer by a tenant, the sublessor, of a portion of the leasehold interest to another party, the sublessee, through the execution of a sublease. The sublease spells out all of the rights and obligations of both parties, including the payment of rent to the sublessor. The original tenant remains primarily liable for the original lease with the landlord. The subtenant is liable only to the original tenant.

43
Q

Tenant Default

A

A landlord or tenant who violates any of the terms and covenants of the lease has breached the contract and is in default. In the event of a default, the damaged party may pursue court action, including suing for:

Damages
Cancellation of the lease
Specific performance

44
Q

A lease may terminate for any of the following causes:

A 
Term expiration
Notice
Voluntary agreement
Property destruction
Condemnation
Foreclosure
45
Q

Tenant 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. In such a case, the tenant remains liable for payment of rent.

46
Q

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.

47
Q

Net lease

A

the tenant pays not only the rent for occupancy, but also pays maintenance and operating expenses such as taxes, insurance, utilities and repairs.

48
Q

Graduated lease

A

the rent payments start at a fixed amount but increase as the lease term matures.

49
Q

Ground/Land lease

A

concerns the land portion of a real property.

50
Q

Percentage lease

A

is a lease whose rental is based on a percentage of the monthly or annual gross sales made on the site.

51
Q

Proprietary Lease

A

conveys a leasehold interest to an owner of a cooperative.

52
Q

Index Lease

A

provides for the adjustment of rent according to changes in a price index.

53
Q

Residential lease

A

may be 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.

54
Q

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

A

ease 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

55
Q

Commercial lease

A

may be a net, gross, or percentage lease if the tenant is a retail business

56
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

57
Q

Uniform Residential Landlord and Tenant Act (URLTA)

A

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

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

58
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

59
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

60
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

61
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

62
Q

Conveyance of Leased Property

A

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

63
Q

Parties

A

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

64
Q

Property Description

A

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

65
Q

Exclusive Possession

A

The landlord must provide an irrevocable right to exclusive possession during the lease term, provided the tenant meets all obligations. In Texas, a landlord must take whatever action is necessary, including any incurred costs, to vacate the premises from holdover tenants.

66
Q

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.

67
Q

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.

68
Q

Offer and Acceptance

A

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

69
Q

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. Multiple tenants who sign a single lease are jointly and severally responsible for fulfilling lease obligations. Thus, if one renter abandons an apartment, the other renters remain liable for rent.

70
Q

Oral vs Written Form

A

As we stated earlier, 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.

71
Q

Clear Statement of Term

A

The term is how long the lease will last. The lease must indicate the length. Usually the lease is written in annual terms; however, it has no limit. It’s important for both parties to understand when the lease will expire. The parties can shorten the length of the lease by mutual agreement.

72
Q

Rent Amount and Payment

A

A rent clause stipulates the time, place, manner and amount of rent payment. It defines any grace period that is allowed, and states the penalties for delinquency. In most cases the lease agreement specifies payment in advance on a month-to-month basis.

73
Q

In Writing

A

As we said, any lease for more than one year should be in writing. Oral leases for more than one year cannot be legally enforced in court.

74
Q

Signatures

A

The landlord must sign the lease to convey the leasehold interest. A tenant is not required to sign the lease, but it would be best to do so in order to enforce the terms of the lease.

75
Q

Delivery

A

The landlord must deliver the lease to the tenant and each party must have duplicate originals.

76
Q

Security Deposit

A

A security deposit should not be used as a final month’s rent. At the end of the lease, if the tenant honored the terms and conditions of the lease and left the apartment in the same condition as it was when rented, except for normal wear, the owner must return the full security deposit. If damage was done, the owner may apply part or all of the security deposit to the cost of repair.

In Texas, a landlord must refund the security deposit minus any charges for damages within 30 days of surrender of the premises (60 days for commercial leases). The tenant is not obligated to give advance notice that he or she is surrendering the premises as a condition for the refund, except when the lease specifically makes such notice a requirement. However, the requirement must be under lined and placed in conspicuous bold print.

77
Q

Sec Dep Liability

A

A landlord in Texas who refuses to return a security deposit can be liable for three times the amount of the deposit plus $100 and any applicable attorney fees.

78
Q

Implied warranty of habitability means that the property owner must:

A

Keep basic structural elements of the building, including floors, stairs, walls, and roofs, safe and intact.
Maintain all common areas, such as hallways and stairways, in a safe and clean condition.
Keep electrical, plumbing, sanitary, heating, ventilating, and air-conditioning systems and elevators operating safely.
Supply cold and hot water and heat in reasonable amounts at reasonable times.
Provide trash receptacles and arrange for trash pick-up.
Manage known environmental toxins such as lead paint dust and asbestos so that they don’t pose a significant danger.
In most states, provide rental property that is reasonably safe from the threat of foreseeable criminal intrusions,
Exterminate infestations of rodents and other pests.

79
Q

Section 92.0561 of the Property Code qualifies how the tenant may do this.

A

The deductions for repairs for any month may not exceed one month’s rent or $500, whichever is greater. However, if the tenant’s rent is subsidized in whole or in part by a governmental agency, the deduction limitation means the fair market rent for the dwelling and not the amount of monthly rent that the tenant actually pays. The government agency subsidizing the rent makes the determination. Otherwise, fair market rent is a reasonable amount under the circumstances.
The repair person or supplier cannot place a lien on the property for the materials or services contracted by the tenant. The landlord is not personally liable for the repairs.
Unless there is an agreement to the contrary, the tenant, the tenant’s immediate family, the tenant’s employer or employee of a company in which the tenant owns an interest cannot make the repairs.
The repairs must be made by a company, contractor or repair person listed in the Yellow Pages or business section of the telephone directory. Otherwise, they may appear in the classified section of a local or county newspaper or in the newspaper in an adjacent county at the time the tenant gives the landlord notice of having selected the repair-and-deduct option.
No repairs may be made to the foundation or load-bearing structure of a building containing two or more dwelling units.
All repairs must be made in compliance with building codes, including building permits when required.
After the repairs are made, the tenant must furnish the landlord a copy of the repair bill and the receipt for payment with the balance of the next month’s rent.

80
Q

A lease may terminate for any of the following causes.

A

Term expiration - In a tenancy for years, the lease automatically terminates at the end of the lease term.
Notice - Proper notice by either party may terminate a periodic leasehold, or a tenancy at will.
Voluntary agreement - Both parties can agree to terminate a lease at any time.
Property destruction - Destruction of the property is grounds for terminating lease obligations.
Condemnation - A taking by eminent domain proceedings generally terminates a lease.
Foreclosure - A foreclosure extinguishes all prior interests in a property, including a leasehold.

Prin II (13 decks)

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