section 7 real estate leases

Question 1

A lease contract is best described as
a. a temporary transfer of legal title.
b. an instrument of conveyance of limited title.
c. a conveyance of a possessory interest.
d. a title conveyance in exchange for rent.

Answer 1

c. a conveyance of a possessory interest.

Question 2

When a tenant acquires a leasehold estate through a lease, what does the property owner acquire?
a. A freehold estate
b. A reduced leasehold estate
c. A leasehold estate
d. A leased fee estate

Answer 2

d. A leased fee estate

Question 3

When an owner leases her property, she temporarily relinquishes the right to
a. transfer the property.
b. encumber the property.
c. occupy the property.
d. maintain the property.

Answer 3

c. occupy the property.

Question 4

Which of the following happens when a leased property is sold?
a. The buyer acquires title subject to the lease.
b. The lease is cancelled.
c. The lease expires within thirty days unless renewed.
d. A new lease is automatically executed.

Answer 4

a. The buyer acquires title subject to the lease

Question 5

A landlord and tenant complete a one-year lease. The following week, the landlord dies. Which of the following is true?
a. The lease is cancelled and must be re-written.
b. The tenant must continue to abide by all lease terms.
c. The tenant may annul the lease at his or her option.
d. The landlord’s heirs may cancel the lease at their option.

Answer 5

b. The tenant must continue to abide by all lease terms.

Question 6

If a lease does not state a specific ending date, when does it terminate?
a. Immediately, since it is an invalid lease
b. After one year
c. When either party gives proper notice
d. Whenever the property is sold

Answer 6

c. When either party gives proper notice

Question 7

In accordance with the Statute of Frauds,
a. leases in excess of one year must be recorded to be enforceable.
b. oral leases are not enforceable.
c. a five-year lease must be in writing to be enforceable.
d. an unwritten lease is fraudulent.

Answer 7

c. a five-year lease must be in writing to be enforceable.

Question 8

What is one important difference between a sublease and a lease assignment?
a. In an assignment, responsibility for the original lease is transferred completely to the assignee.
b. In a sublease, the original tenant retains primary responsibility for performance of the original lease contract.
c. A sublease does not convey any of the leasehold interest.
d. A sublease conveys the entire leasehold interest.

Answer 8

b. In a sublease, the original tenant retains primary responsibility for performance of the original lease contract.

Question 9

Which of the following lease types conveys rights other than the rights to exclusive use and occupancy of the entire property?
a. A rights lease
b. A percentage lease
c. A gross lease
d. A net lease

Answer 9

a. A rights lease

Question 10

An owner leases a property to a business in exchange for rent. The tenant is required to pay all operating expenses as well. This is an example of a
a. proprietary lease.
b. percentage lease.
c. gross lease.
d. net lease.

Answer 10

d. net lease.

Question 11

The percentage lease is most often used by
a. industrial landlords.
b. retail landlords.
c. residential landlords.
d. office landlords.

Answer 11

b. retail landlords.

Question 12

Which of the following summarizes the general terms of a ground lease?
a. The landlord sells the ground to another, then leases it back.
b. A tenant buys the landlord’s ground, then leases the improvements.
c. The landlord leases the ground floor of the building to a commercial tenant.
d. The tenant leases the ground from the landlord and owns the improvements.

Answer 12

d. The tenant leases the ground from the landlord and owns the improvements.

Question 13

Among the usual remedies available to the injured party if tenant or landlord defaults on the terms of a lease is the right to
a. sue to compel performance of the contract.
b. enter a lien against the other’s estate.
c. lock the other party out of the premises.
d. apply the security deposit to legal expenses.

Answer 13

a. sue to compel performance of the contract.

Question 14

A lease automatically terminates under which of the following circumstances?
a. The tenant fails to pay rent.
b. The leased property is foreclosed.
c. The tenant goes out of business.
d. The landlord cancels the lease.

Answer 14

b. The leased property is foreclosed.

Question 15

One of the aims of the Uniform Residential Landlord and Tenant Act is to
a. create a standard residential lease for use nationwide.
b. force states to enact tenants’ rights laws.
c. establish uniform rental rates for each type of property.
d. discourage the use of unfair and overly complex leases.

Answer 15

d. discourage the use of unfair and overly complex leases.

Question 16

a model law
enacted as a blueprint for state laws to regulate leasing and management
practices of landlords with residential properties. Numerous states have
enacted tenant-landlord regulations in response to the law. The act aims to:
• equalize and standardize rights of landlord and tenant
• protect tenants from unethical practices
• prevent unfair, complex leases and their enforceability

Answer 16

The Uniform Residential Landlord and Tenant Act (URLTA)

Question 17

In an instance where the landlord’s negligence or disruptive action has
rendered the property unoccupiable, a tenant may vacate the premises and
declare that the lease is cancelled by default. This action, called constructive
eviction, can nullify the tenant’s lease obligations if the claim succeeds in court.
In order to obtain a constructive eviction judgment, the tenant must vacate the
premises.

Answer 17

Constructive Eviction:

Question 18

Forced performance of one’s obligations in an agreement, to the letter of the
agreement. A legal remedy for a damaged party to take against a defaulting
party.

Answer 18

Specific Performance:

Question 19

In an instance where the landlord’s negligence or disruptive action has
rendered the property unoccupiable, a tenant may vacate the premises and
declare that the lease is cancelled by default. This action, called constructive
eviction, can nullify the tenant’s lease obligations if the claim succeeds in court.
In order to obtain a constructive eviction judgment, the tenant must vacate the
premises.

Answer 19

Constructive Eviction:

Question 20

Forced performance of one’s obligations in an agreement, to the letter of the
agreement. A legal remedy for a damaged party to take against a defaulting
party.

Answer 20

Specific Performance:

Question 21

A landlord or tenant who violates any of the terms and covenants of the lease
has breached the contract and is in default.

Answer 21

Default:

Question 22

A lease of the land-only portion of a parcel of real property.

Answer 22

Ground Lease:

Question 23

A retail property lease which requires a tenant to pay a minimum amount of
rent plus an additional increment that reflects the sales achieved by the tenant.

Answer 23

Percentage Lease:

Question 24

A lease requiring the landlord to pay all of a property’s operating expenses,
including those that pertain to an individual tenant.

Answer 24

Gross Lease:

Question 25

An assignment of the lease is a transfer of the entire leasehold interest by a
tenant, the assignor, to a third party, the assignee. There is no second lease,
and the assignor retains no residual rights of occupancy or other leasehold
rights unless expressly stated in the assignment agreement. The assignee
becomes primarily liable for the lease and rent, and the assignor, the original
tenant, remains secondarily liable. The assignee pays rent directly to the
landlord.

Answer 25

Assignment:

Question 26

Subletting (subleasing) is the 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 the
sublessor and sublessee, including the payment of rent to the sublessor. The
sublessor remains primarily liable for the original lease with the landlord. The
subtenant is liable only to the sublessor.

Answer 26

Subletting:

Question 27

Duration of the lease. The four principal types of leasehold estate are:
• estate for years: has a specific lease term
• estate from period-to-period: the lease term automatically renews
• estate at will: has no specified lease term
• estate at sufferance: a tenancy without consent

Answer 27

Lease Term:

Question 28

In conveying the leasehold estate, the landlord acquires a leased fee estate,
which entails the rights to:
. receive rent
• re-possess the property following the lease term
• monitor the tenant’s obligations to maintain the premises

Answer 28

Leased Fee Estate:

Question 29

An estate that entails temporary rights of use, possession, and to an extent,
exclusion, but not legal ownership.

Answer 29

Leasehold Estate:

Question 30

In a lease arrangement, the renter is the tenant, or lessee.

Answer 30

Lessee:

Question 31

In a lease arrangement, the owner is the landlord, or lessor.

Answer 31

Lessor

Question 32

A lease which requires a tenant to pay rent as well as a share of the property’s
operating expenses to the extent provided for in the lease contract.

Answer 32

Net Lease:

Question 33

The percentage lease is most often used by
A. industrial landlords
B. retail landlords
C. residential landlord’s
D. office landlord

Answer 33

B

Question 34

Under the Uniform Residential Landlord and Tenant Act, if a lease does not state a clear expiration date, the lease is regarded as
A. invalid.
B. a tenancy from period-to-period.
C. a tenancy at will.
D. a tenancy for years

Answer 34

A

Question 35

Which of the following circumstances is the most likely scenario for a ground lease?

A. A PUD developer wants to acquire a necessary parcel that separates two parcels she already owns.
B. A farmer wants to expand his productive acreage without buying more land.
C. A fast food company wants to place a restaurant in an existing building without buying either land or improvement.
D. A railroad wants to build a bridge over a privately owned access road.

Answer 35

B

Question 36

The type of lease in which the tenant pays rent based on
income generated at the leased premises is a(n)
A. commercial lease.
B. index lease.
C. percentage lease.
D. overage lease.

Answer 36

C

Question 37

The type of lease in which the landlord pays all of the
operating expenses of the property is a(n)
A. gross lease.
B. proprietary lease.
C. index lease.
D. net lease.

Answer 37

A

Question 38

The type of lease in which the tenant pays all of the operating expenses of the property is a(n)
A. gross lease.
B. commercial lease.
C. index lease.
D. net lease.

Answer 38

d

Question 39

A tenant transfers a portion of the leasehold interest to another party. The document that accomplishes this transfer is a(n)
A. deed.
B. assignment.
C. sublease.
D. reconveyance.

Answer 39

C

Question 40

Three college friends rent a house together, and all three sign the lease. After a month, the friends argue and two of them move out. Which of the following is true of the rent
obligation?
A. The remaining tenant is responsible for the full rent obligation.
B. The remaining tenant is responsible for one third of the rent obligation.
C. No one is responsible for the rent obligation. The landlord loses.
D. The departing tenants have no further rent obligation.

Answer 40

A

Question 41

While a one-year lease is in effect, the tenant dies of a sudden illness. In this situation,
A. the lease automatically terminates.
B. the tenant’s estate has the option of canceling the contract.
C. the landlord can record a lien against the leased fee interest.
D. the tenant’s estate is still obligated under the lease.

Answer 41

D

Question 42

Among a landlord’s primary obligations in a lease is
A. insuring the tenant against loss of personal property.
B. providing required building support and services.
C. guaranteeing that a fair rent is being charged.
D. insuring the property for the value of the leasehold.

Answer 42

B

Question 43

Among a tenant’s primary obligations in a lease is
A. compliance with the rules and regulations of the building.
B. payment for any alterations to the leased space
C. recording the lease in title records.
D. satisfying the municipality’s requirements for an occupancy permit.

Answer 43

A

Question 44

A landlord generally has the right to enter the leased premises
A. at any time without notice.
B. for specified reasonable purposes.
C. only at the time rent is due.
D. only thirty days prior to lease expiration.

Answer 44

B

Question 45

Which of the following types of leasehold estate lacks a
specific term?
A. Estate for years.
B. Estate from period-to-period.
C. Estate at will.
D. Estate at sufferance.

Answer 45

C