Chapter 15 - Leasing & Property Management

Question 1

Lessor

Answer 1

Landlord

Question 2

Lessee

Answer 2

Tenant

Question 3

Lease

Answer 3

an agreement, whether oral or written, for transfer possession of real property or both real and personal property for a definite period of time.

Question 4

Statute 704.1

Answer 4

Lease

Question 5

Statute of Fraud

Answer 5

It needs to be in writing.

Question 6

Leasehold estate

Answer 6

A tenant’s right to possess real estate for the lease’s term.

Question 7

Requirements of a valid lease

Answer 7

• Legal Capacity. All parties must be legally capable (of sound mind, and of legal age)
• The objectives of the lease must be legal.
• There must be an offer and mutual acceptance of the terms within the offer.
• Leases must be backed by valid consideration. Of course, normal consideration is rent paid to occupy an apartment or space. But in certain instances, rent is not required for a lease to be valid. On certain occasions, labor performed on the property is consideration enough to occupy a space. Leases are contracts and not subject to modification in the price of rent or any other terms.

Question 8

Estate (tenancy) for years

Answer 8

leasehold estate that remains for a definite or specific period of time; years, months, weeks, or even days. An estate for years (sometimes referred to as fixed term tenancy) always has specific beginning and ending dates.

Question 9

Estate from period to period (periodic tenancy)

Answer 9

is created when the landlord and tenant enter into an agreement for an indefinite or unspecific amount of time.

Question 10

holdover tenancy

Answer 10

after a lease term has expired, a new lease agreement isn’t always formally made

Question 11

Landlord Obligations | Wisconsin Statute 704.17

Answer 11

• Tenancy from year to year. At least 30 days written notice is required at any time within the four-month period prior to the last 30 days of the lease period.
• Tenancy from month to month. In any periodic estate having a term of less than year to year but greater than week to week, 14 days written notice is required.
• Tenancy from week to week. 5 days written notice is required.
• Farm tenancies from year to year. Parties must give at least 90 days written notice to terminate and may do so only at the end of the period. To vacate March 1, farm tenancy notice must be given by November 1. 28 Days in WI coinciding with the end of the rent paying period

704.19 giving notice by mail adds two days for the mail process.

Question 12

Estate (tenancy) at will

Answer 12

will, a tenant’s rights are not specified by time, they can continue without expiration. It only terminates by the tenant’s or owner’s death. Estate at will is very uncommon and courts view them warily.

Question 13

Estate (tenancy) at sufferance

Answer 13

takes place after a tenant lawfully possesses a property, then continues to possess the property without legal consent by the landlord after their possession rights expire.

Question 14

Wisconsin Entry Law

Answer 14

requires 12 hours notice and in a reasonable amount of time to enter a tenant’s leased property.

Question 15

Reasons a landlord can keep all or a portion of a tenants security deposit

Answer 15

Damage in Excess of Normal Wear and Tear

Unpaid Rent

Unpaid Utilities

Money Owed for Violating Nonstandard Rental Provisions

Question 16

Time that a landlord has to return the security deposit

Answer 16

21 Days

Question 17

Wisconsin Statute 704.28

Answer 17

If any amount has been withheld from the security deposit, the landlord must include a written itemized list stating what deductions have been made and the amount that has been withheld.

Question 18

Fair Housing Act

Answer 18

Prospective tenants may not be discriminated against on the basis of physical disability.

Question 19

Reasonable Modifications

Answer 19

Any tenant with a disability must be allowed to make reasonable modifications to a propertyat their own expense. If the modifications would interfere with a future tenant’s use,the landlord may require the premises be restored to their original condition at the end of the lease term at the tenant’s own personal expense

Question 20

Americans with Disabilities Act (ADA)

Answer 20

applies to commercial, nonresidential property in which public goods or services are provided. The ADA requires that such properties either be free of architectural barriers or provide reasonable accommodations for people with disabilities.

Question 21

Assigned Lease

Answer 21

If a tenant transfers ALL of his leasehold interests to another person. Whatever agreements were made in the original lease, the new tenant is compelled and legally responsible for the same agreement

Question 22

Subleasing

Answer 22

When a tenant transfers LESS THAN ALL . The first tenant is held accountable for the lease and any damages while the rent is being paid by the new tenant.

Question 23

Nondisturbance Clause

Answer 23

mortgage clause stating that the mortgagee agrees not to terminate the tenancies of lessees who pay their rent should the mortgagee foreclose on the mortgagor-lessor’s building.

Question 24

Defaulted Payment Landlord options

Answer 24

1. He may elect to serve the tenant with five days’ written notice, demanding payment of the delinquent rent within five days after the notice is received. If the tenant fails to pay the rent, the landlord may terminate the lease automatically and sue for possession without further notice. If the tenant pays the past-due rent, the lease continues in full force.
2. Alternatively (and in cases in which the tenant’s breach is other than nonpayment of rent), the landlord may terminate the tenancy by serving the tenant with ten days’ written notice, including a demand for possession. After the ten-day period expires, the landlord may sue for possession without further notice, even if the default is cured.

Question 25

Gross Lease

Answer 25

Agreement in which the tenants rent payment is a flat or fixed amount. The landlord is required to pay all other operating expenses.

Question 26

Net Lease

Answer 26

Requires the tenant to pay rent in addition to all or some operating expenses also paid by the tenant.

Question 27

Triple-net lease (Net-net-net lease)

Answer 27

The tenant pays all operating and other expenses in addition to rent. These include taxes, insurance, assessments, maintenance, utilities, and other charges related to the premises.

Question 28

Percentage Lease

Answer 28

most often in commercial retail or restaurant leasing. Percentage comes from the commercial tenants sales at the property while conducting business. Varies month to month based on sales.

Question 29

Variable Lease

Answer 29

when lease payment changes at various times.

Question 30

Ground lease

Answer 30

The lease of the ground and only the ground.

Question 31

Oil and Gas Lease

Answer 31

arises when an energy company discovers or explores for natural resources. The land owner leases the rights to an oil company and in exchange receives an upfront payment with possible royalties.

Question 32

Lease purchase

Answer 32

when a tenant desires to purchase the property but cannot afford to purchase yet.

Question 33

Cash Rents

Answer 33

an agreed-on rental amount in cash in advanced

Question 34

Sharecropping

Answer 34

percentage of the profits or losses from the sale of the crop when it is sold

Question 35

Actual Eviction

Answer 35

When a tenant refuses to vacate the premises peaceably after a judgment for possession has been entered, the landlord must deliver the order to the sheriff, who will forcibly evict the tenant. The landlord then has the right to re-enter and regain possession of the property.

Question 36

Constructive Eviction

Answer 36

the tenant has the right to sue and recover damages when a landlord breaches the agreement. Constructive eviction can occur when the leased premises become uninhabitable because of neglect, then the tenant may have the right to abandon terminating the lease. The tenant must prove that in court.

Question 37

Building and Housing Codes

Answer 37

laws, ordinances, or governmental regulations concerning the construction, maintenance, habitability, operation, occupancy, use or appearance of any premises or dwelling unit.

Question 38

dwelling unit

Answer 38

structure or that part of a structure that is primarily used as a home, residence, or place of abode.

Question 39

Management Agreement requirements

Answer 39

* The beginning and end date of agreement. * The property manager’s responsibilities, duties and authority over employees. * Service and maintenance authority * The property owner’s goals, responsibility and duties * Description of the property. This should include the street address of the property as well as the legal description. * Statement of the goals. The owner should clearly state what the manager is to accomplish. One owner may want to maximize net income, while another will want to increase the capital value of the investment. Long-term goals are often key. * Extent of the manager’s authority. This provision should state what authority the manager is to have in matters such as hiring, firing, and supervising employees; fixing rental rates for space; and making expenditures and authorizing repairs. Repairs that exceed a certain expense limit may require the owner’s written approval. * Reporting. The frequency and detail of the manager’s periodic reports on operations and financial position should be agreed on. These reports serve as a means for the owner to monitor the manager’s work and operational trends; they form a basis for shaping management policy. * Management fee. The fee may be based on a percentage of gross or net income, a fixed fee, or some combination of these and other factors. Management fees are subject to the same antitrust considerations as sales commissions and cannot be standardized in the marketplace (e.g., price-fixing). The fee must be negotiated between the property manager and the principal. In addition, the property manager may be entitled to a commission on new rentals and renewed leases. * Allocation of costs. The agreement should state which of the property manager’s expenses—such as office rent, office help, telephone, advertising, and association fees—will be paid by the manager. Other costs will be paid by the owner. * Antitrust provisions. Management fees are subject to the same antitrust considerations as sales commissions. * Equal opportunity statement. Residential property management agreements should include a statement that the property will be shown, rented, and otherwise made available to all persons protected by state or federal law.