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Law of Contracts > Leases > Flashcards

Leases Flashcards

1
Q

What is a lease

A

A lease is both an instrument of conveyance and a contract between principal parties to uphold certain covenants and obligations.

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2
Q

What makes a lease a binding contract

A

A lease is binding when each party accept the terms of the agreement and communicate their agreement to the other party. However, it’s always a good idea to have this in writing.

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3
Q

In what circumstances are tenants required to receive an “Information about Brokerage Services” form?

A

If the tenant is entering into a lease that is longer than a year or considering an option-to-buy, the tenant must receive the form.

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4
Q

What are some examples of how the Fair Housing Law restricts landlords?

A

It restricts:
How they are allowed to advertise a property
Questions they can ask on rental applications
The screening fee they charge a potential tenant
How they deal with their tenants

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5
Q

What does the term “leaseholder estate” refer to?

A

It refers to a lessee or tenant’s ownership of a temporary right to land or property.

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6
Q

How can an estate for years benefit both a tenant and a landlord?

A

Tenant often has a fixed in rent amount for the term of the lease.
Landlord has guaranteed rent for the term of the lease.

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7
Q

What is the main difference between estate for years and periodic tenancy?

A

Estate for years has a definite ending date and periodic tenancy does not

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8
Q

What is an estate at sufferance?

A

This estate is created when a tenant takes legal possession of the property but then remains on the property without the owner’s consent after the lease terminates.

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9
Q

Where can licensees obtain residential lease agreement forms?

A

The Texas Association of Realtors and the Texas Apartment Association each provides a residential real estate lease form for its members.
The Texas Real Estate Commission provides a Buyer’s Temporary Residential Lease and a Seller’s Temporary Residential Lease available to licensees.

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10
Q

What does the clause regarding security devices refer to in a lease agreement?

A

TexasProperty Code requires that landlords executing a lease agreements with a term over 90 days must change the locks from the previous tenant.

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11
Q

List three covenants that are common in a lease. (See screen 23 for other correct answers.)

A

Demising clause
Description of the premises
Clear statement of term

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12
Q

What does it mean if there are no limitations on the use of the property written into the lease?

A

If no limitations are written into the lease, the tenant may use the property for any lawful purpose, providing the tenant does not violate any deed restrictions

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13
Q

Define a gross lease

A

The tenant pays a fixed rent and the owner pays the taxes, insurance and other normal ownership expenses.

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14
Q

How is the increase in a graduated lease typically calculated?

A

By the increase in the property value based off an appraisal

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15
Q

When is a percentage lease commonly used?

A

In commercial agreements with shopping centers or retail stores.

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16
Q

How are residential leases different from commercial leases?

A

The terms are normally shorter than commercial leases
The clauses are fairly standard from one property to the next
The clauses are generally not negotiable

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17
Q

List three commons causes of a lease termination. (See screen 34 for other correct answers.)

A

Term expiration
Voluntary agreement
Property destruction

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18
Q

What are the most common causes of tenant default?

A

Tenant default occurs most commonly from failure to pay rent or maintain the premises.

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19
Q

What is the most common form of landlord default?

A

The most common form of landlord default is failure to provide services and maintain the property condition.

20
Q

What happens to the lease if the tenant dies?

A

The lease does not terminate. It becomes part of the tenant’s estate, which is bound by the terms of the lease.

21
Q

A lease is both

A

an instrument of conveyance and a contract between principal parties to uphold certain covenants and obligations

22
Q

The legal essence of a valid lease is that it

A

conveys an exclusive right to use and occupy a property for a limited period of time in exchange for rent and the return of the property after the lease term is over.

23
Q

In a lease arrangement

A

the owner is the landlord, or lessor, and the renter is the tenant, or lessee.

24
Q

Several of the laws that apply to the sale of property also apply to leasing property. These include:

A 
Statute of frauds
Agency disclosure
Lead Based Paint
Sex Offender Laws
Fair Housing Laws
American Disabilities Act
25
Q

There are four basic types of leasehold estates:

A

Estate for years
Estate from Period to Period
Estate at Will
Estate at Sufferance

26
Q

Estate for years

A

has a definite beginning and ending date, does not require notice to terminate, and does not have automatic renewal.

27
Q

Estate from period to period (periodic estate)

A

has no definite end date, typically run month-to-month, and requires proper notice to terminate.

28
Q

Estate at will

A

has no time limit. The possession is given with permission, but there is no agreement about the rent. Either party can terminate at will, with proper notice.

29
Q

Estate at Sufferance

A

is created when a tenant remains on the property without the owner’s consent after the lease terminates

30
Q

Holdover Tenant

A

A tenant who doesn’t leave when the lease expires

31
Q

The Law of Contracts governs the

A

making, interpretation, and enforcement of leases. Consequently, the requirements for making a valid lease are the same as for making a valid contract.

32
Q

The covenants (agreements or promises) in the lease are very important and include:

A 
Capacity to contract
Demising clause
Description of the premises
Clear statement of term
Specification of rent and how it is to be paid
In writing
Signatures
Delivery
33
Q

There are many different types of leases.

A 
Gross Lease
Net Lease
Graduated Lease
Ground/Land Lease
Percentage Lease
Proprietary Lease
Index Lease
34
Q

Gross Lease

A

requires the landlord to pay the property’s operating expenses, including utilities, repairs, and maintenance, while the tenant pays only rent.

35
Q

Net Lease

A

the tenant pays not only the rent for occupancy, but also pays maintenance and operating expenses such as taxes, insurance, utilities and repairs.

36
Q

Graduated Lease

A

the rent payments start at a fixed amount but increase as the lease term matures.

37
Q

Ground/Land Lease

A

concerns the land portion of a real property. The owner grants the tenant a leasehold interest in the land only, in exchange for rent.

38
Q

percentage lease

A

a lease whose rental is based on a percentage of the monthly or annual gross sales made on the site.

39
Q

Proprietary lease

A

conveys a leasehold interest to an owner of a cooperative

40
Q

Index Lease

A

provides for the adjustment of rent according to changes in a price index.

41
Q

A lease may terminate for any of the following causes.

A 
Term expiration
Notice
Voluntary agreement
Property destruction
Condemnation
Foreclosure
Breach of contract
42
Q

Tenant default occurs most commonly from

A

failure to pay rent or maintain the premises. If a tenant is in default, the landlord may file a suit for possession, also called a suit for eviction.

43
Q

The most common form of landlord default is failure

A

to provide services and maintain the property condition. In an instance where the landlord’s negligence or disruptive action has rendered the property unlivable, 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.

44
Q

If the landlord sells the property

A

the lease remains in effect and the new landlord is bound by its terms. If the landlord dies, the landlord’s estate remains bound to provide occupancy despite the landlord’s death.

45
Q

If the tenant dies, the lease does not terminate

A

It becomes part of the tenant’s estate, which is bound by the terms of the lease.

Law of Contracts (25 decks)

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