Leases and Clauses

Question 1

Assignment

Answer 1

A transfer to another of any property or right; the transfer of one’s entire interest in property

Question 2

Cash Rent

Answer 2

Lease between an agricultural landowner and tenant. Rent paid for exchange of use of agricultural land

Question 3

Graduated Lease

Answer 3

A lease that provides for agreed-upon rent increases

Question 4

Gross Lease

Answer 4

A simple lease used in most houses and apartment complexes

Question 5

Ground Lease

Answer 5

A long-term lease for the use of land

Question 6

Hold Harmless Clause

Answer 6

A clause in commercial leases that transfers all liability for the leased premises to the tenant

Question 7

Index Lease

Answer 7

A lease that allows for periodic increases in base rental fees based on a predetermined guideline

Question 8

Net Lease

Answer 8

A commercial lease wherein the tenant pays a base rent plus maintenance, property taxes, and insurance

Question 9

Novation

Answer 9

A formal assumption in which a new borrower is substituted for the original maker of the note

Question 10

Oil or Gas Lease

Answer 10

A lease that generally requires a flat fee for the exploration for gas and oil and a royalty if any is found

Question 11

Option Clause

Answer 11

A lease clause giving the tenant the option to renew the lease or to purchase the property

Question 12

Percentage Lease

Answer 12

Commercial lease in which the tenant pays a percentage of the gross income received by the tenant, in addition to rent

Question 13

Rooftop Lease

Answer 13

Used to rent the airspace above a piece of real estate

Question 14

Sale and Leaseback Leases

Answer 14

Used after a person has developed a building and wants his or her working capital available for other developments

Question 15

Sale Clause

Answer 15

A clause in residential leases that allows the tenant or landlord to terminate the lease in the event the subject property is sold

Question 16

Sandwich Lease

Answer 16

A lease held by a lessee who becomes a lessor by subletting; sandwich leaseholder is neither owner nor the user of property typically

Question 17

Sharecropping

Answer 17

Lease between an agricultural landowner and tenant. Land owner may provide equipment and land in return for tenants maintaining and harvesting crops

Question 18

Sublease

Answer 18

A lease from a lessee to another lessee; the new lessee is a sublessee or subtenant

Question 19

Variable Lease

Answer 19

A lease that provides that the rent may increase during the term of the lease including an index lease and a graduated lease