Unit 16: Leases

Question 1

Net lease

Scoops up everything (pays all) in the net

Answer 1

Tenant pays basic rent PLUS all or most expenses

Landlord pays some property expenses

Question 2

Percentage lease

%

Answer 2

Tenant pays basic rent PLUS a percentage of gross sales and may pay property expenses

Question 3

Gross lease

It’s not gross, it’s normal

Answer 3

Tenant pays basic rent and the landlord pays expenses of ownership

Question 4

Ground lease

Answer 4

Allows for separate ownership of land and the building

Long term

Question 5

Lease purchase

Answer 5

Part of rent may be used for purchase price

Question 6

Sale-and-leaseback

Answer 6

Allows original owner to use property while freeing up capital for other business purposes
Or basically
Old owner becomes the lessee

Question 7

Tenancy for years /

Estate for years

Answer 7

Definite period

Question 8

Tenancy at will /

Estate at will

Answer 8

No specified term
Express agreement
Can be terminated by owner or tenant at any time on proper notice

Question 9

Periodic tenancy /

Estate from period to period

Answer 9

No specific expiration but payment due at definite intervals

Automatically renews

Question 10

Holdover tenant

Answer 10

Tenant from a tenancy for years stays past lease terms expires and landlord accepts rent payment

Question 11

Tenancy at sufferance

Answer 11

Tenant stays without landlords consent

• tenant is trespassing and landlord can begin eviction process
• landlords acceptance of payment creates a holdover

Question 12

Sandwich lease

Answer 12

When the original lessee becomes a sublessor bc he has an assignment or sublease and still makes the payment

Question 13

Elements of a valid lease

Answer 13

• offer and acceptance
• capacity of parties
• consideration
• legal objective

Question 14

Nondisturbance clause

Answer 14

Lender agrees not to terminate tenancies in the event of foreclosure