Leases/Methods of Ownership/Taking Title

Question 1

Death of lessor or lessee or sale of property does not terminate the lease TRUE or FALSE

Answer 1

True

Question 2

A lease provision (key term lease provision) that limits a landlord’s costs due to increases in taxes, insurance and other operating costs is? (hint commercial lease term)

Answer 2

Expense Stop

Question 3

Sale of a leased property DOES/DOES NOT terminate the lease.

Answer 3

DOES NOT

Question 4

Creating the automatic right of survivorship in a property ownership means that upon the death of one person, that person’s interest goes to ? without ?

Answer 4

Surviving Tenants
Probate

Question 5

The 4 unities of joint tenancy are ? , which stands for:
T
T
I
P

Answer 5

Time
Title
Interest
Possession

Question 6

Corporations, LLCs, and other legal entities cannot take title as JTWRS because CORP, LLCs and legal entities have perpetual existence or/aka?

Answer 6

they don’t die

Question 7

Joint tenants MAY/MAY NOT convey their interest without permission of the other joint tenants

Answer 7

MAY

Question 8

If two people own as joint tenants and one transfers his/her interest to another party, the joint tenancy is broken, and the third party is tenant in common with the other owner. TRUE/FALSe

Answer 8

TRUE

Question 9

Ownership of property by two or more legal or natural persons< which does not have the right of survivorship is ? ? ?

Answer 9

Tenancy in Common

Question 10

Although the four unities required (TTIP) required for joint tenancy may be present, the only unity of ownership required for tenancy in common is possession. TRUE/FALSE

Answer 10

True

Question 11

The Methods of taking title are Severalty, JTWRS, Community Property, CPWRS, Tenancy In Common. Describe each:

Answer 11

Severalty
** # of ppl 1
** Relationship NONE
** Requirements NONE
** % of Ownership: 100%
** At Death: Heirs

JTWRS
# of ppl 2+
Relationship: NO Corps, LLCs, et
Requirements: TTIP
% of Ownership: Equal
At Death: Automatic Right of Survivorship

Community Property
# of ppl 2
Relationship: Married
Requirements: Both must sign to sell
% of Ownership: 50%
At Death: Heirs

CPWRS
# pp 2
Relationship: Married
Requirements: Both Must sign to sell
% of Ownership: 50
At Death: Auto right to survivorship

Tenancy in Common
# of ppl 2+
Relationship: NONE
Requirements: Unity of Possession
% of Ownership: Equal or Unequal
At Death: Passes based on method of ownership

Question 12

How would two buyers take title if they were not related?

a. Sole and separate
b. Tenancy in common
c. Interval
d. community property

Answer 12

B. Tenancy in Common

Question 13

• The lessee pays a fixed rent, taxes insurance, and maintenance in a*
• a. gross lease*
• b. net lease*
• c. index lease*
• d. percentage lease*

Answer 13

B.

Question 14

In a net lease, a lessee can deduct which of the following items from federal income taxes

Answer 14

C.

Question 15

Which actions would not terminate a lease

a. constructive eviction of tenant
b. condemnation of the property
c. actual eviction of the tenant
d. sale of property

Answer 15

D.

Question 16

Which of the following businesses would most likely have a percentage lease

a. art gallery
b. consumer research company
c. municipal utility
d. gov’t office

Answer 16

A.

Question 17

In a lease with an option to purchase, the option is enforceable by

a. optionor
b. optionee
c. either party
d. neither party

Answer 17

B.

Question 18

The best example of a percentage lease would be a lease in which the rent was a % of the tenants

a. gross income
b. net income
c. net receipts w/ a min rent
d. gross receipts w/ a min rent

Answer 18

D.

Question 19

When a landlord gives a tenant the right to buy the property within two years at a fixed price, it is called a

a. sale leaseback
b. option
c. right of first refusal
d. net lease

Answer 19

B.

Question 20

Which situation would automatically terminate a lease

a. abandonment and surrender
b. expiration date of the lease
c. death of the tenant
d. death of the owner

Answer 20

B.

Question 21

The clause in a lease that would call for periodic increases in rent is the

a. escalator clause
b. excess rent clause
c. acceleration clause
d. percentage clause

Answer 21

A.

Question 22

Which statement is incorrect concerning sale leasebacks?

a. proceeds of the sale will free up working capital
b. an investor buys the property and leases the property back to the seller
c. the lessee can deduct rent as a business expense on hi income taxes
d. ownership of the property never actually changes

Answer 22

D.

Question 23

A tenant is leasing a prop which the tenant is interested in buying. The owners are not sure they want to sell at this time. What type of contract would give the owners most freedom of choice

a. option
b. purchase contract
c. right of first refusal
d. lease option

Answer 23

C.

REMEMBER

Options and first right of refusal are both unilateral contracts. The question was which gave the MOST freedom.

First right of refusal is the BEST answer bc the owner has the opp to say IF I DECIDE TO SELL/LEASE, I WILL GIVE YOU THE FIRST OPP

In an OPTION, the optionee has the right within a specified period for a specified $

Question 24

If tenants have a three year lease on a property and the prop sold

a. all leases must be renegotiated within 30 days
b. the new owner takes over the leases
c. the new owner may evict all tenants within 30 days
d. the leases remain if effect if the new owner does not renegotiate them within 60 days

Answer 24

B.

Question 25

In a commercial lease, what limits increases in the landlord's costs such as taxes and insurance a. common area maintenance fees b. expense stop clause c. tenant improvements d. escalator clause

Answer 25

B.

Question 26

Under the Federal Protecting Tenants at Foreclosure Act, all of the following are correct except a. tenants must receive at least 90 days notice to vacate b. leases that were in force prior to the beginning of foreclosure must be honored c. tenants who are evicted must receive “cash for keys” d. the act does not protect commercial tenants

Answer 26

C.

Question 27

A lease in which the landlord pays all expenses is a a. net lease b. gross lease c. Index lease d. proprietary lease

Answer 27

B.

Question 28

A lease in which the tenant pays the expenses is a a. net lease b. gross lease c. graduated lease d. general lease

Answer 28

A.

Question 29

A net lease is sometimes called a (think Net Net Net)

Answer 29

Triple net lease

Question 30

The landlord is liable for mortgage payments in what type of lease ## Footnote a. ground lease b. anchor lease c. sale leaseback d. net lease

Answer 30

D. ***Remember*** ***a net lease is a COMMERCIAL LEASE and tenant pays all expenses INCLUDING TAX and INSURANCE*** ***LANDLORD is responsible for MORTGAGE***

Question 31

A lease in which the tenant was the former owner is a a. triple net lease b. sale leaseback c. lease option d. proprietary lease

Answer 31

B.

Question 32

A lease in which he rent increases and decreases at specified times a. ground lease b. graded lease c. index lease d. gross lease

Answer 32

B. aka Graduated lease

Question 33

A lease in which the tenant has the right to buy or re-lease the property a. percentage lease b. lease option c. anchor lease d. gross lease

Answer 33

B. *CLUE: The question said tenant has **the right to buy or re-lease.** the **BEST** answer is lease **OPTION.*** ***Remember an _option and right of first refusal are unilateral contracts_***

Question 34

* A lease in whcih the tenant is a shareholder in a cooperative is a* * a. index lease* * b. anchor lease* * c. percentage lease* * d. proprietary lease*

Answer 34

D. Just remember: Proprietary = Coop!!

Question 35

* A lease in which the tenant is a nationally recognized company* * a. gross lease* * b. ground lease* * c. anchor lease* * d. net lease*

Answer 35

C.

Question 36

* Alterations to a leased space to accommodate the lessee's use are:* * a. expense stop* * b. surrender and acceptance* * c. escalator clause* * d. tenant improvements*

Answer 36

D.

Question 37

* Mutual agreement to terminate a lease is called* * a. condemnation clause* * b. actual eviction* * c. constructive eviction* * d. surrender and acceptance*

Answer 37

D.

Question 38

* The legal term for the eviction process* * a. foreclosure* * b. surrender and acceptance* * c. ejectment aka forcible entry and detainer action* * d. constructive eviction*

Answer 38

C.

Question 39

* If a landlord breaches lease terms resulting in the property becoming uninhabitable and causing the tenant to terminate the lease, it is referred to as* * a. ejectment* * b. eminent domain* * c. constructive eviction* * d. expiration of term*

Answer 39

C. CLUE: in the question *if a **landlord breaches lease terms*** *Constructive eviction is a **tenants remedy***

Question 40

*Death of the landlord or tenant does/does not terminate the lease*

Answer 40

DOES NOT

Question 41

*Sale of a leased property does/does not terminate the lease*

Answer 41

does not

Question 42

# Two Types of evictions... ***_Two types of EVICTIONS_*** ***1._ACTUAL_ (_landlord's action_)** eviction action taken by the landlord if the tenant fails to perform obligations.* ***\*\*\*Ejectment aka Forcible Entry and Detainer Action** is the **_legal proceeding_** to regain possession of the property* ***2._CONSTRUCTIVE (tenant's action)_** Process of tenant terminates the lease due the landlord's failure to perform obligations, such as **failing to provide heat or air conditioning or failing to cure other problems that make the prop inhabitable***

Question 43

# Termination of Leases terms * ***_Surrender and Acceptance_ MUTUAL AGREEMENT to end the lease.*** * ***_Eminent Domain_** tenant is no longer able to use the prop due to **condemnation** of the prop, the lease usually terminates. **_Commercial leases**_ a _**condemnation clause_** specifies the landlord's and tenant's rights if eminent domain is exercised* * ***_Condemnation clause_ limits** a **tenant's claims against the landlord** _for any compensation the landlord receives from the government_* * ***_Foreclosure of a Mortgage_*** ***_Protecting Tenants at Foreclosure Act_** requires landlords who _acquire_* ***_RESIDENTIAL PROPERTY_** _through foreclosure_ to**:*** ***\*\*Give tenants a _min of 90 DAYS NOTICE to vacate_*** ***OR*** ***_honor_ the _remaining term of the lease if greater than 90 days_*** ***_COMMERCIAL PROPERTY_ foreclosure _MAY allow_ the _new owner to terminate the lease_***