Leases Flashcards
What are leases?
Leases are a non freehold interest in real estate.
Also known as: non-freehold, rental, leasehold, tenancy for years, estate for years, demise, etc.
They are a written conveyance of possession & use of real estate for some specific period of time.
Privity of Estate
Legal relationship between two people w/ interest in the same property.
Leases are subject to the contract essentials, which are…
- offer & acceptance
- consideration
- legal object
- consent
- competence
What are the essentials of a lease?
- Sufficient description of the premises
- Rental amount ($)
- Terms of lease
- Intent to rent
Who are the parties involved in a lease?
The lessor-owner/landlord
The lessee-tenant
How long cant a lease last?
A lease cannot last more than 99 years.
-Leases lasting longer than 7 years, in MA, must be recorded w/ the registry of deeds because it would be considered an encumbrance.
What is the lessor liable for?
The lessor is liable & insures the common areas.
What is the lessee liable for?
The lessee is liable for & insures the lease premises.
What is “useable sq. footage” in terms of commercial leases?
Space that the lessee can occupy & is responsible for (space used exclusively by the tenant).
What is “rentable sq. footage” in terms of commercial leases?
Both the lease premises & a percentage of the common areas used by the lessee, but maintained by the lessor (places like the elevator, lobby, etc.).
What is a build-out?
A big open office space that can be reconfigured easily and quickly. Either party can pay for the reconfiguration.
What type of interest does the lessor hold?
A reversionary interest.
The lessor gets the property back (possession wise) at the end of the lease.
Do leases run w/ the land.
Yes. They are binding on new owners.
Certificate of no defense/estoppel certificate
Used to confirm the lease when the property is sold.
Doctrine of estoppel
Once you cause another to rely on your words, you can’t go back on your promises.
-Prevents the tenant from attempting to renegotiate.
What are the three ways to transfer a lease?
- Sublet
- Assign
- Novate