Unit 17: Leases Flashcards
A contract between a property owner and a tenant
Lease
The owner of the real estate is known as the
Lessor- landlord
The tenant is also called this
Lessee
The tenant’s right to possess real estate for the term of the lease is called a
Leasehold estate (less than freehold)
What are the four types of leasehold estates
- Estate for years- definite period of time
- Estate from period to period- indefinite term with automatic renewal
- Estate at will- indefinite term of stay
- Estate at Sufferance- refuses to leave property
In MA to evict a tenant at will, requires how much notice in writing
30 days
In MA for a lease to be considered enforceable it must be in
writing
What are the requirements of a valid lease
- Capacity to contract (legal age and sound mind)
- Have a legal objective (not breaking any laws)
- Offer and acceptance- mutual agreement
- Consideration- exchange of promises i.e. rental for known fee
The lessee can occupy the premises without interference from the owner or anyone else, known as
Covenant of quiet enjoyment
This occurs when a tenant transfers the entire leasehold interest to another person
assignment
A tenant transfers less than the entire leasehold interest to a new tenant
Subleasing- subletting
What are the types of leases
- Gross lease
- Net lease
- Net net net lease
- Percentage lease
Most common type of lease when the tenant pays the rent and the landlord pays the rest
Gross lease
Lease where the tenant pays the rent and some of the expenses
Net lease
This lease is one where the tenant pays rent and all the expenses
Triple net (net-net-net lease); retail properties
Lease where the tenant pays rent plus a percentage of the gross sales
Percentage lease- malls (retail business)
These leases have built in increases in rent payments over the lease term
Variable lease or a graduated lease
The terms of this lease are from 50 to 99 years
Ground lease
Renting with an option to buy
Lease purchase
Sell the property and then lease it back for an agreed period and rental
Sale and leaseback
When a tenant violates any lease provision, the landloard may sue the tenant
Breach of lease
In MA any lease for more than one year must be in
writing
What are the specific MA law required procedures for eviction
A landlord must give a two weeks written notice to the tenant and the tenant may pay all overdue rent plus landlord expenses during that period.
In a tenancy at will, the law requires landlords give the tenant as much time to stay in the property as one rental period after the landlord provides a notice to quit the property; usually 30 days and maximum of 3 months.
The landlord may enter the property without violating the tenant’s right of quiet enjoyment for the following reasons
- in accordance with a court order
- to make necessary repairs
- to show the property to a prospective tenant
- if it appears the tenant has abandoned the property
At the time a tenancy commences, no tenant may be required to pay any amount in excess of the following:
*The first month’s rent
*The last month’s rent
*A security deposit equal to the first month’s rent, and
*The purchase and installation cost for a key and lock
This is not the landlord’s money to keep and must be kept in a separate bank account in MA; no credit unions allowed.
Security deposit- Tenant is entitled to receive it within 30 days of the termination of the lease.
If a security deposit is required, this form must be provided in writing to the tenant 10 days prior to moving in.
Statement of condition- tenant has 15 days to review and add any damages that the landlord did not include in the list. Both parties must sign
A landlord must provide one of these that lists amount of money received, date received, intended use of money, name of person receiving money, name of landlord if different, a statement that the tenant is entitled to the interest on the deposit, address and apt number, location and name of bank, account number of the fund in which the money is deposited; a statement the tenant provide the landlord a forwarding address so when they move, they can receive the interest.
Receipt
Landlords are entitled to withhold the following three deductions from the security deposit
any unpaid rent
any unpaid increase in real estate taxes for which the tenant is liable under the lease
the reasonable cost of repairing damage caused by the tenant, excluding normal wear and tear
