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Real Estate > Property Management/Leases Quiz > Flashcards

Property Management/Leases Quiz Flashcards

1
Q

An estate for years would be created by:

a. express agreement
b. adverse possession
c. operation of the law
d. holding over

A

a. express agreement

Because it is a lease for a specified period of time, there must be specific agreement

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2
Q

The tenant who remains in possession after the lease expires:

a. is on a periodic tenancy
b. has a freehold interest
c. is a tenant at sufferance
d. has a servient tenement

A

c. is a tenant at sufferance

in many areas, the holdover tenant can be treated like a trespasser

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3
Q

The effect of a lease assignment is that the

a. entire lease interest is transferred
b. assignee makes rent payments to the assignor
c. assignee is a tenant of the assignor
d. assignor remains primarily liable on the lease

A

a. entire lease interest is transferred

The assignee makes rent payments to the original lessor

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4
Q

In accordance with the Uniform Residential Landlord and Tenant Act, a lessor may properly require that the tenant:

a. Pay a security deposit equal to two months’ rent
b. Agree to a limitation on the owner’s liability
c. Pay any lessor attorney fees arising from a dispute
d. Restrict use of the premises to residential purposes.

A

d. Restrict use of the premises to residential purposes

Unless the lease authorizes other use

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5
Q

A lease prohibited assignment or subletting without the owner’s prior approval. The lessee assigned without asking the lessor. The Assignment is:

a. void
b. voidable
c. unenforceable
d. illegal

A

b. voidable

The owner can consider it a material breach and terminate the lease or accept the assignment

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6
Q

The Uniform Residential Landlord and Tenant Act provides that the tenant.

a. can agree to hold the landlord harmless for actions of the landlord
b. may apply the security deposit to the last month’s rent
c. may not unreasonable withhold permission for the landlord to enter the premises
d. will make the repairs necessary to keep the premises fit for habitation

A

c. may not unreasonable withhold permission for the landlord to enter the premises

Entry must be for a reasonable purpose with reasonable notice.

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7
Q

A sub-lessee is a(n):

a. assignee
b. owner
c. tenant
d. lessor on a sublease

A

c. tenant

The sub-lessee is the tenant of the sub-lessor (original lessor) on a sublease

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8
Q

An advantage offered to an investor buying a structure subject to a ground lease rather than buying a structure and the land is:

a. not having to pay for an unneeded structure
b. lower investment requirements
c. being able to deduct interest payments
d. the advantage of a continued rental income

A

b. lower investment requirements

The purchase price would be less, but the buyer of the building would pay rent for the land use

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9
Q

A clause in a three-year lease provides that should the tenant retain possession after expiration of the lease, it will be on a month-to-month basis with a significant increase in rent. This clause is intended to discourage a:

a. lease renewal
b. lease extension
c. tenancy at sufferance
d. Surrender of the premises.

A

c. tenancy at sufferance

A holdover clause discourages the tenant from remaining in possession because of higher rent. It encourages agreement to a new lease.

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10
Q

A lessee is relieved of all obligations under the lease when the:

a. lessee is evicted for rent arrearage
b. property is sold
c. lessee is constructively evicted
d. lessee can no longer afford to pay the rent

A

c. lessee is constructively evicted

Lessor breached lease so lessee, who vacates, is relieved of all further lease obligations

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11
Q

A lease in which the lessee’s total monthly rent costs remain unchanged for the term of the lease is what type of lease?

a. gross
b. net
c. percentage
d. graduated

A

a. gross

It is also known as a flat lease

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12
Q

Broker L, who manages property for M, approaches tenant N for back rent a day after M dies. N refuses to pay. The broker should:

a. give N statutory notice to quit or pay rent
b. start an unlawful detainer action
c. turn the matter over t o a collection attorney
d. take no further action

A

d. take no further action

The agency agreement terminated with the death of the principal

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13
Q

J leased to K, who subleased to L, who then subleased to M. The lease between K and L could be regarded as a(n):

a. sandwich lease
b. assignment
c. master lease
d. flat lease

A

a. sandwich lease

It is a sublease lease that does not involve both the owner and the tenant in possession. Subleases are often referred to as sandwich leases.

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14
Q

A lessee transferred partial lease interests. This is a(n): a. step-lease

b. gross lease
c. assignment
d. sublease

A

d. sublease

While an assignment transfers all interests, a sublease can transfer a partial interest.

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15
Q

The lessee pays for fire insurance under what type of lease?

a. Gross
b. Percentage
c. Triple net
d. Graduated payment

A

c. Triple net

The lessee is liable for all maintenance and operational expenses plus taxes and insurance and gives the landlord a net amount

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16
Q

What type of long term lease is best for a commercial tenant during an inflationary period?

a. gross
b. percentage
c. index
d. net

A

a. gross

The rent would not increase; therefore, it would not be good for the landlord

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17
Q

A property manager is in trouble because of compensation received. This compensation was a:

a. percentage of the gross
b. fee for leasing
c. fee for supervising repairs
d. kickback from a supplier

A

d. kickback from a supplier

The property manager cannot make a secret profit.

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18
Q

A mineral formerly used in home construction that can cause lung cancer is:

a. asbestos
b. lead
c. radon
d. urea formaldehyde foam

A

a. asbestos

It was used as insulation and in floor and ceiling tile as well as acoustical spraying.

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19
Q

A former owner could be liable for the physical condition of the premises even after ten years:

a. if a warranty deed was used to convey title
b. If the owner failed to specify “as is.”
c. Under the federal Comprehensive Environmental Response Compensation and Liability Act of 1980.
d. Under the Uniform Residential Landlord and Tenant Act.

A

c. Under the federal Comprehensive Environmental Response Compensation and Liability Act of 1980.

The former owner could be liable for hazardous waste deposited on the property.

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20
Q

G leased a commercial building to S for ten years. After six months, S moved out without notice. G advertised for a tenant. G’s actions relate to:

a. liquidated damages
b. mitigation of damages
c. punitive damages
d. severance damages

A

b. mitigation of damages

The lessor has a duty to keep tenant damages as low as reasonable possible.

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21
Q

A child was injured when he fell through the floor in an abandoned house. If the owner was held liable for the injury, the house was probably considered a(n):

a. encroachment
b. attractive nuisance
c. hazardous substance
d. implied easement

A

b. attractive nuisance

There is a special duty of owners when property is likely to attract children.

22
Q

One reason a company would sell and then lease back its real property would be:

a. the deductibility of interest
b. to reduce monthly expenses
c. liquidity
d. the tax benefits of depreciation

A

c. liquidity

to obtain cash from an illiquid asset

23
Q

When a lease is assigned, who is responsible for rent obligations?

a. The assignee becomes primarily liable under the lease, and the assignor is released.
b. The assignor remains primarily liable under the lease. c. The assignee becomes primarily liable under the lease, and the assignor retains secondary liability.
d. The assignee is liable only to the assignor, and the assignor is liable to the lessor.

A

c. The assignee becomes primarily liable under the lease, and the assignor retains secondary liability.

in a sublease, the original lessee (sub-lessor) would have remained primarily liable.

24
Q

A commercial lease for a definite period of time is terminated by:

a. death of the lessor
b. death of the lessee
c. a sale by the lessor
d. surrender

A

d. surrender

An acceptance of the premises by the seller ending all lease obligations

25
Q

A lessor believes the desirability and sales volume of a large retail store will increase dramatically in the next few years. In negotiating a long-term lease for the premises, the lessor would ask for what type of lease? a. flat

b. triple net
c. percentage
d. gross

A

c. percentage

this would mean greater rent as retail volume increases.

26
Q

R rented a summer cottage for the first two weeks in July. What type of tenancy does R have?

a. Estate for years
b. Estate at will
c. Periodic tenancy
d. Tenancy at sufferance

A

a. Estate for years

A lease for a definite period of time.

27
Q

An example of constructive eviction would be a:

a. tenant who refuses to pay rent
b. tenant being given a notice to quit or pay rent
c. landlord cutting off the tenant’s heat and water
d. Tenant who remains in possession after termination of the lease.

A

c. landlord cutting off the tenant’s heat and water

Constructive eviction is wrongful conduct bya landlord that forces the tenant to move, it ends all lease obligations.

28
Q

After receiving a three-year lease, a residential tenant moved in and paid the first month’s rent, but failed to sign and return a copy to the lessor. As to the tenant’s obligations the:

a. tenant can cease the tenancy after a 30-day notice
b. lease is invalid because it is an oral lease for more than one year
c. tenant can leave but must forfeit any security deposit d. tenant remains bound to the provisions of the lease

A

d. tenant remains bound to the provisions of the lease

The tenant accepted the lease by performance of paying rent.

29
Q

A valid lease must include:

a. an exculpatory provision
b. the specified use of the premises
c. a definite termination date
d. a description of the premises

A

d. a description of the premises

Description must be clear and unambiguous

30
Q

A lessee would have the greatest protection with a(n): a. estate for years

b. estate at will
c. tenancy at sufferance
d. periodic tenancy

A

a. estate for years

If lessee is not in default, lessee is assured possession for a set period.

31
Q

A purchaser concerned with EMF’s would be interested in knowing about:

a. underground fuel storage tanks
b. use of urea formaldehyde foam insulation
c. electrical transmission lines
d. the presence of a radon gas

A

c. electrical transmission lines

Electromagnetic fields are believed by many to have serious effects on health (disputed).

32
Q

A tenancy based on permissive occupancy without any tenancy agreement would be a:

a. month-to-month lease
b. freehold interest
c. tenancy at sufferance
d. tenancy at will

A

d. tenancy at will

It is personal and cannot be assigned

33
Q

An owner died, which immediately ended a tenant’s rights. What kind of tenancy was it?

a. Tenancy at will.
b. Tenancy at sufferance.
c. Periodic tenancy
d. Estate for years.

A

a. Tenancy at will.

Ceases on death of tenant or landlord

34
Q

A lease that ends on a specified date without the requirement of notice is a(n):

a. tenancy at will
b. estate for years
c. tenancy at sufferance
d. periodic tenancy

A

b. estate for years

Lease for a definite period of time

35
Q

A residential lease has an implied covenant of:

a. acknowledgment
b. exculpation
c. merger
d. habitability

A

d. habitability

Also implied covenant of quiet enjoyment

36
Q 
A residential tenant on a month-to-month tenancy generally has 
a: a. gross lease 
b. net lease 
c. percentage lease 
. graduated lease
A

a: a. gross lease

Most residential tenants pay a flat rental

37
Q

A tenant on a long-term lease purchased the building from his landlord and resold it to investors at a profit making no mention of lease rights. The lease was terminated by:

a. commercial frustration
b. merger
c. surrender
d. recordation

A

b. merger

When the tenant purchased the building, there was no longer a tenancy because the lessor interest (leasehold) was merged into the ownership

38
Q

In the absence of a notice to terminate, a lease that automatically renews itself would be a:

a. periodic tenancy
b. tenancy for years
c. gross lease
d. ground lease

A

a. periodic tenancy

Such as a month-to-month lease

39
Q

A landlord included a clause in the lease that said the tenant would not hold the landlord liable for personal injury or property damage for any reason. This is considered a(n):

a. recapture clause
b. quiet enjoyment clause
c. exculpatory clause
d. holdover clause

A

c. exculpatory clause

Not valid for residential leases

40
Q

A tenant has the right to meet the terms offered by any prospective new tenant when the current lease expires. What is this right called?

a. holdover provision
b. option
c. right of first refusal
d. extension agreement

A

c. right of first refusal

Right of first refusal can be for leasing as well as purchase

41
Q

The Uniform Residential Landlord and Tenant Act provides that:

a. it is a one-year lease when no rental period is agreed to
b. if no rental amount is specified, then no rent can be collected
c. the tenant must sign an exculpatory clause if requested to do so
d. the maximum security deposit for unfurnished units is one months rent

A

d. the maximum security deposit for unfurnished units is one months rent

And 1 ½ months for furnished units (many states have modified these amounts.

42
Q

A lease provides that every June l, the monthly rent will increase by$50. What type of lease is this?

a. flat lease
b. net lease
c. graduated lease
d. index lease

A

c. graduated lease

Step-up lease is a graduated lease.

43
Q

A property management contract should include

a. a list of properties currently managed by the manager
b. the obligations and responsibilities of the manager
c. the manager’s professional qualifications
d. an ethnic breakdown of current tenants

A

b. the obligations and responsibilities of the manager

As well as the responsibilities of the owner

44
Q

What colorless, odorless gas causes cancer and enters a home through the foundation?

a. PCBs
b. EMFs
c. Radon
d. Urea formaldehyde

A

c. Radon

It is a naturally occurring gas linked to lung cancer

45
Q

A landlord failed to deal with a serious rodent problem, claiming she could not afford an exterminator. A tenant could break a lease based on:

a. commercial frustration
b. constructive eviction
c. merger
d. destruction of the premises

A

b. constructive eviction

Tenant can treat breach as proper cause to end lease obligations

46
Q

The initial action in an eviction for nonpayment of rent would be a(n):

a. unlawful detainer action
b. write of possession
c. seizure notice
d. notice to quit or pay rent

A

d. notice to quit or pay rent

Followed by the unlawful detainer action

47
Q

A lessor wants a tenant to protect the lessor from claims of others based on problems concerning the premises. What type of insurance would the lessor want the lessee to carry?

a. public liability
b. errors and omissions
c. homeowner policy
d. fire and extended coverage

A

a. public liability

With the Landlord as a named insured

48
Q

A tenant moved out with 18 months remaining on the lease. To mitigate damages, the landlord:

a. boarded up the premises to prevent vandalism
b. advertised the vacancy
c. sued the tenant for the amount owing
d. sued the tenant for amount owing plus balance on the lease

A

b. advertised the vacancy

A duty to re-rent to keep damages low as possible. Can only sue for rent due not for future rent.

49
Q

A tenant suffered from lead poisoning relating to the occupancy of an older apartment. The cause was likely:

a. insulation
b. radon leakage
c. flaking paint
d. related to EMF

A

c. flaking paint

Most oil-based house paints in use prior to 1978 had high concentrations of lead.

50
Q

An owner wanted to structure the lease to provide income benefits like an annuity but also wanted inflation protection. To a long-term net lease she added a provision relating to:

a. the Consumer Price Index
b. EMF
c. A right of first refusal
d. Quiet enjoyment

A

a. the Consumer Price Index

The consumer price index is commonly used in leases so rent reflects actual purchasing power.

Real Estate (16 decks)

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