Real Property Management Part 2 Flashcards
Who is the “lessee”?
A person who leases the property
Who is the “lesssor”
A person who leases property to another, aka, the landlord.
What does “familial status” refer to?
Familial status refers to any family situation with children under 18 years old
Who is responsible for enforcing NY State’s fair housing laws?
The Division of Human Rights - created to carry out the guarantees against discrimination.
Under the FEDERAL Fair Housing Act, can a landlord refuse to rent an apartment to an unmarried couple?
Yes
Marital status is NOT A FEDERALLY PROTECTED CLASS.
Americans with Disabilities Act of 1990 (ADA)
prohibits discrimination against disability “with regards to the full and equal enjoyment of the goods, services, facilities, or accommodations.”
Requires all public and commercial facilities to be accessible to individuals with disabilities
A disabled individual, confided to a wheelchair, would like to rent an apartment. The disabled individual states that the property would need to be made handicapped accessible. What happens now?
Landlord/owners are required to make provisions for handicap accessibility, but it does not require the landlord to bear the expense of the renovations AND the property is to be returned to its original condition upon termination of occupancy.
NYS Security Deposits are required to be put in interest bearing accounts if the property consists of….
6 or more units.
What is “rent control”?
A series of state and local regulations that restricts the amount of rent charged by property owners and restricts an owner’s right to evict residents
Generally applied to residential buildings that were constructed before 1947 in municipalities that have not declared an end to the rental housing emergency declared as a result of WWII
What is “rent stabilization”
Provides additional protections to tenants, including requiring certain essential services and providing the right to renew a lease for a term of one or two years.
Local rent guidelines boards determine the maximum rents allowable and allowable rent increases in rent-stabilized apartments
NYC Rent Stabilized Apartments include…
-at least 6 unit buildings that were built between 1947 - 1973 and tenants in buildings built before 1947 who moved in after June 30 1971.
Rent stabilization only applies to non rent controlled apartments in at lease 6 unit buildings that were built before 1/1/1974
Fact.
What is maximum base rent (MBR) system?
rent control operates under this system that is established for each apartment and is adjusted every two years to reflect changes in operating costs.
Example - increases services or substantially rehabilitates a building or installs a major capital improvement + experiences a hardship + experiences increased labor costs + experiences increased fuel costs
What does the NYS Warranty of Habitability Law state?
Property owners are required to lease property that is habitable and livable at the beginning of the lease term and to maintain the premises in habitable and livable conditions throughout the lease terms
What is a “gross lease” (full service lease)?
A lease that is straightforward exchange of rent for occupancy. Tenant pays a fixed rent.
Landlord pays all ownership expenses - property taxes, mortgage payments, repairs, janitorial services, insurance, sometime utilities
What is a “modified gross lease”?
Tenants may be responsible for utilities, trash removal, and cleaning
What is a “net lease”
Tenant pays some or all the costs of ownership - utilities and repair, in addition to agreed upon rent
Including taxes, insurance, common area maintenance
What is a “net lease”
Tenant pays some or all the costs of ownership - utilities and repair, in addition to agreed upon rent
Including taxes, insurance, common area maintenance
What is a “single net lease”?
If a lease requires the tenant to pay one of the three - taxes, insurance, common area maintenance
What is a double net lease (net-net) lease?
If a lease requires the tenant to pay two of the three - taxes, insurance, common area maintenance
What is a “triple net” lease (net-net-net)?
If a lease requires the tenant to pay three of the three - taxes, insurance, common area maintenance
Commercial: What is a percentage lease?
A lease for which the tenant pays a percentage of gross sales on the premises, often in addition to a fixed monthly rental payment.
This type of lease is most commonly used for retail tenants and may include a clause that allows the owner to reclaim the premises if ross sales fall below a specified point
Commercial: What is a Graduated lease?
Spells out step by step rent increases or decrease, generally paid in installments.
Commercial: What is an index lease
One in which the amount of the rent is tied to some common index factor such as consumer price index or wholesale price index that neither the landlord nor the tenant controls.
Estoppel
legal doctrine by which a person or party is prevented from taking a position, denying a fact or asserting a fact inconsistent with previous conduct or statements.
Estoppel certificate is an instrument that bars the person executing it from later asserting a fact or claim inconsistent with representations made in the instrument.
What would help ensure that two tenants in the same strip mall aren’t competing against each other with the same merchandise?
“Use clause” - landlords may insert a use clause to restrict the use of the leased space
What is a novation?
A novation is a new contract. One party to the contract withdraws and a new one is substituted
What does subordination do?
places the existing lease in an order junior to that of the new mortgage on the leased property.
What is a subordination clause?
Clause that is agreed in advance the tenant (lessee) will grant waiver of their priority in favor of the new mortgagee.
Attornment
an act by which tenants acknowledge a new landlord
Assignment
Method of disposing of leased space
Types of Lease Clauses (7)
Use, Attornment, Estoppel, Sublease + Assignment + Assumption, Subordination/non-Disturbance, Utilities/Electric Service, Escape
What is a non-disturbance agreement?
Agreement executed by the mortgagee and attached to the lease document thereby becoming part of the lease
What is the right of first refusal?
Gives tenant the right to have the first opportunity to buy or lease property if the owner decides to put it up for sale or lease.
