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Flashcards in Leases Deck (11)
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0
Q

A lease for which the tenant pays some or all of the ownership expenses-property taxes, mortgage payments, insurance, etc.-in addition to monthly rent payment. This type of lease, which is typically used for commercial properties, the property owner or landlord has shifted much of the risk for increased costs to the tenants, but the tenants get the additional tax benefits of the business expense. What type of lease is this?

A

Net Lease

1
Q

The tenant pays a fixed rate, while the owner or landlord pays all ownership expenses, such as property taxes, mortgage payments, repairs, insurance etc., and sometimes utilities. This lease is rarely used for commercial properties. What type of lease is this?

A

Gross Lease

2
Q

A _____ is a lease for which the tenant pays a _______ of gross sales on the premises. Often in addition to a fixed monthly rental payment. This type of lease is most commonly used for retail tenants and may include a clause that allows the owner to reclaim the premises if gross sales fall below a specified point.

A

Percentage lease

3
Q

A ________ will spell out step-by-step rent increases or decreases, generally paid in installments. An example might be a long time lease that spells out annual rent increases.

A

Graduated lease

4
Q

A lease that includes a(n) _____ _____ requires the lessee to pay more rent to offset rising expenses as they occur. For example, property tax increase is rolled in, and the landlord passes that increase along to the tenant.

A

Escalation clause

5
Q

An ____ _____ is one in which the amount of rent is tied to some common index indicators such as the consumer price index, or the wholesale price index that neither the landlord nor the tenant control. As agreed-upon index increases, the rent goes up by the same percentage of change

A

Index lease

6
Q

Often called a ground lease, is a lease for which a tenant leases only the land from the landlord, but the land tenant actually owns the building. This usually is first on when the land is vague, but either party can freely transfer their interest and obligations to subsequent purchasers who agree to abide by the terms of the land lease. This type of lease usually has a term equal to the life expectancy of the building, but can be for up to 99 years.

A

Land (or ground) lease

7
Q

A _____and _____ arrangement is a method for financing commercial or industrial properties. In the situation, a company will construct a building that suits it’s needs, and then sells the building to investor, who becomes the landlord. This allows the tenant company to have more liquid assets to invest in product or other resources, rather than having all assets tied up in the real estate. There are also tax advantages for both the company and lessee and the investor/ lessor.

A

Sale-and-leaseback

8
Q
  • The parties names
  • The parties signatures
  • The amount of rent is due
  • The duration of the lease
  • an adequate description of the property,. For many leases, the street address is enough, but if the lease is going to be recorded, and a full legal description may be acquired.
A

Standard Lease Elements

9
Q

This type of lease automatically renews itself at the end of time unless notice is given

A

Periodic lease

10
Q

Exclusive, longer term lease given to a person who lives in a cooperative and owns stock in the cooperative

A

Proprietary Lease