Section 7: Property Management Flashcards
1
Q
Residential Leases and Parties Involved:
*Agents are legally allowed to write up leases in the State of Arizona and can act as ______ on behalf of others.
A
Property Managers
2
Q
Residential Leases and Parties Involved:
*The “__________” is the written document that transfers RIGHTS from a landlord to a tenant.
IMPORTANT: This is because of Article 26 in the Arizona Constitution!
A
Lease
3
Q
Residential Leases and Parties Involved:
*The “Lease” is the written document that transfers RIGHTS from a landlord to a tenant.
IMPORTANT: This is because of Article __________ in the Arizona Constitution!
A
26
4
Q
Residential Leases and Parties Involved:
*_______:
This means to convey or grant a leasehold estate.
rights in the lease.
A
Demise
5
Q
Residential Leases and Parties Involved:
*Demise:
To convey or grant a leasehold estate.
IMPORTANT: Don’t confuse with ‘_______’ which means:
*Rent is the actual amount of consideration paid by the tenant for the rights in the lease.
A
Devise
6
Q
Residential Leases and Parties Involved:
*_______: Landlord or the ‘Giv-OR of the lease (Landlord)
A
LessOR
7
Q
Residential Leases and Parties Involved:
*_______: Tenant or the ‘Receiv-EE of the lease (Tenant)
A
LessEE
8
Q
Residential Leases and Parties Involved: IMPORTANT: A lease has _______. Since it has this, it is personal property. A lease CAN be traded, given away, or even sold so remember that a tenant has personal property in the lease.
A
Value
9
Q
Leasing Definitions:
* _______: Contract rent refers to the actual rent paid under existing lease contracts executed between owners and tenants.
A
Contract Rent
10
Q
Leasing Definitions:
*_______:
A positive leasehold is created when the market rent is greater than the contract or agreed upon rent.
A
Positive Leasehold
11
Q
Leasing Definitions:
*_______:
Where market rents are actually LESS than the existing lease, making it unlikely to assign or sublet to another tenant.
A
Negative Leasehold
12
Q
Leasing Definitions:
*_______:
Also known as “market Rent” and refers to the potential rental income a property could receive on the open market.
A
Economic Rent
13
Q
Leasing Definitions:
*_______:
A contract rent that is in excess of current market rents.(A bankrupt tenant may renegotiate a new lease in order to remove the excess rent in some cases.)
A
Excess Rent
14
Q
Leasing Definitions:
*_______:
The holder of the lease again has PERSONAL PROPERTY RIGHTS and can transfer their ownership interests to a new lease holder, or can at the same time, transfer their liabilities also.
A
Liabilities
15
Q
Leasing Definitions:
Which of these is NOT a common leasing definition?
Positive Leasehold
Economic Liabilities
Negative Leasehold
Leaseback
A
Economic Liabilities
16
Q
Leasing Definitions:
*_______Leaseback:
After a sale when the new owner leases back the property to the previous/old owner for an AGREED PERIOD of TIME. (common in business/commercial)
A
17
Q
Leasehold Interests in Property:
*A _______Leasehold interest: This interest in property allows someone else to use, occupy and possess another person’s property for a certain DURATION of time
A
18
Q
Leasehold Interests in Property:
*A _______Leasehold Estate:
This is commonly referred to as ‘PERSONAL property’ and NOT real property
*This is a type of Estate called a Leasehold Estate
A
19
Q
Leasehold Interests in Property:
*Lessor could be an individual owner, _______management company or corporation
o Leases are NOT just in residential, but commercial, retail, mining, logging, etc.
A
20
Q
Leasehold Interests in Property:
*Lessor retains ALL ownership rights and has a _______REVERSION Interest.
A
21
Q
Leasehold Interests in Property:
*_______Reversionary Interest: Whereby the property will revert back to the lessor at the termination of the lease
*Leases are typically paid in advance (for the next month ahead)
A
22
Q
Common Types of Leases:
*_______Gross leases: are common to residential rentals.
o Tenants pay the same amount per month as agreed to in lease
o Landlord maintains the property and building expenses
A
23
Q
Common Types of Leases:
*_______Percentage Leases: These are common to retail business
o Tenants usually pay a monthly rent plus a percentage of sales
o The percentage of sales is agreed to in the original lease
Cheaps Clothing Co. pays base rent of $2000/month
Cheaps Clothing Co. also pays 2% of gross sales/month
A
24
Q
Common Types of Leases:
*_______Net leases:
These are common to commercial buildings
o Lessee pays same amount per month per lease
o Lessee pays a percentage of the fixed expenses of the property
A
25
Common Types of Leases:
*_______NET leases: are common to commercial buildings
o Term Triple Net is common or Net-Net-Net Lease
Doug's Diggers Inc leases a warehouse for $5000/month
Doug's Diggers Inc has a Triple Net Lease pays an additional $1000/month for their share of the common expenses
Triple Net covers building taxes, insurance, utilities, etc.
Common Area Maintenance Charges (CAMS)
26
Common Types of Leases:
*_______Variable Leases:
These are leases that can fluctuate and are not locked.
27
Common Types of Leases:
*_______Graduated Leases: are where rent increases at a predetermined time
*These are considered PROPRIETARY Leases and are unique to the leasehold interest in a Co-Op Building.
28
Common Types of Leases:
*Graduated Leases: are where rent increases at a predetermined time
*These are considered _______Proprietary Leases and are unique to the leasehold interest in a Co-Op Building.
29
Common Types of Leases:
*Graduated Leases:
o Owners of a cooperative own shares in the corporation (building)
o Owners have a ‘_______proprietary lease’ allowing the to use their unit.
30
Common Types of Leases:
*_______Water, Oil, Mineral, Gas Leases:
This lease allows companies to extract natural resources from land
o Exploration and extraction on land not owned by company
o A typically nominal amount is paid per month to the land owner in form of lease.
31
Common Types of Leases:
*Water, Oil, Mineral, Gas Leases:
o _______Royalties:
This is money paid to owner if resources are found and extracted from owners land. Landowners can receive this for allowing companies to extract resources (like oil or gas) from their land.
32
Common Types of Leases:
*_______Ground Leases:
These are where the owner retains ownership of the ground and allows building on property.
o Usually a long term lease (25+ years is common)
33
*Ground Leases:
These are where the owner retains ownership of the ground and allows building on property.
o Usually a long term lease. _______25+ years is common.
34
Common Types of Leases:
*Ground Leases:
o Upon expiration of the lease, any _______Improvements on the land revert to landowner.
35
Common Types of Leases:
*Ground Leases:
o Common in some parts of Scottsdale and on Tribal Land
Scottsdale House, SCC, Billboard Signs, Ski Slopes of _______Flagstaff are all owned on a Ground Lease.
36
Common Types of Leases:
*Ground Leases:
These are where the _______Owner retains ownership of the ground and allows building on property.
o Usually a long term lease (25+ Years is common)
37
Common Types of Leases:
This type of lease would have one set fee per month and then a percentage of the sales paid to the landlord in addition:
Net Lease
Ground Lease
Triple Net Lease
Percentage Lease
Percentage Lease
38
Validity of a Lease:
IMPORTANT: Both the Lessor and the Lessee have to _______Attest to or sign the lease.
39
Validity of a Lease:
*_______Subject Matter is usually the address which must be written into the lease.
o Mining and crops as an example, would be written into the lease, not an address.
40
Validity of a Lease:
IMPORTANT: Leases for a period of less than _______1 year in Arizona DO NOT have to be in writing to be enforced.
o However, verbal leases can still be enforced.
o Ex. Snowbirds who rent only for a 4-6 month period in Arizona.
41
Validity of a Lease:
IMPORTANT: Leases for a period of less than 1 year in Arizona DO NOT have to be in writing to be enforced.
o However, _______verbal leases can still be enforced.
o Ex. Snowbirds who rent only for a 4-6 month period in Arizona.
42
Validity of a Lease:
IMPORTANT: _______Statute of Frauds states a lease for MORE than 1 year MUST be in writing to be enforced. This is contrary to the statute in our state because we have so many out of state visitors who ONLY stay for a few months at a time.
43
Validity of a Lease:
IMPORTANT: _______Duration of the lease needs to be agreed to and signed by both parties to be a valid lease.
44
Validity of a Lease:
o Most common residential leases are NOT _______recorded as the estate “reverts” back to owner.
45
Validity of a Lease:
o Commercial, Retail, Mineral, Gas, Oil and even some residential leases for longer periods of time are usually _______recorded to give the public notice.
46
Validity of a Lease:
*Consideration:
Must be explained and written into the lease.
o This isn’t always _______money, could be percentages, shares, goods traded, love and affection etc.
*Exclusionary terms must be identified in the original lease.
47
Validity of a Lease:
What would make a lease invalid?
Both lessor and lessee have signed the lease
Duration of the lease was agreed to and signed on by both parties
Address or description is missing in lease agreement
A verbal agreement to rent for only a five month period
Address or description is missing in lease agreement
48
Validity of a Lease: Case Study:
In this case, what we want to do is have a "conversation" with a potential client. If you can carry on a conversation, you understand the concepts.
Q. What is the difference between a Lessor and a Lessee? As a real estate agent, are you legally allowed to write a lease for the two parties?
A: A Lessor is a Landlord or the ‘Giv-or of the lease’ (Landlord) while the Lessee is the Tenant or the ‘Receiv-ee of the lease’ (Tenant). Yes, Agents are legally allowed to write up leases in the State of Arizona and can act as property managers on behalf of others.
49
Validity of a Lease: Case Study:
In this case, what we want to do is have a "conversation" with a potential client. If you can carry on a conversation, you understand the concepts.
Q: Is a Lessee’s leasehold estate considered personal or real property? What happens to the property once the lease expires?
A: A Leasehold interest in property allows someone else to use, occupy, and possess another person’s property for a particular time. A Leasehold Estate is commonly called ‘personal property’ and not real property. The property will revert to the lessor at the termination of the lease.
50
Validity of a Lease: Case Study:
In this case, what we want to do is have a "conversation" with a potential client. If you can carry on a conversation, you understand the concepts.
Q: Which parties need to sign a lease?
A: Both the Lessor and the Lessee have to attest to or sign the lease.
51
Validity of a Lease: Case Study:
In this case, what we want to do is have a "conversation" with a potential client. If you can carry on a conversation, you understand the concepts.
Q: Is a lease usually recorded? Why or why not?
A: Most common residential leases are not recorded as the estate “reverts” back to the owner. Commercial, Retail, Mineral, Gas, Oil, and even some residential leases for more extended periods are usually recorded to give the public notice.
52
Validity of a Lease: Quiz:
All of the following except which one are types of Short Term Leases?
Exploration Leases
Verbal Leases
Seasonal Leases
Ground Leases
Ground Leases
53
Validity of a Lease: Quiz:
A real property owner who extend some of their rights in their property to someone else for a predefined amount of time could be considered a?
Grantor
Leasee
Lessor
Grantee
Lessor
54
Validity of a Lease:
For a landlord or building owners, a Net Lease would most likely be a preferred type of leasing over a gross lease in which type of property?
Residential Rentals
Rental space located in a Strip Mall
Leases less than one year
Sub Lease
Rental space located in a Strip Mall
55
Validity of a Lease:
Shortly after 11pm the police are called to a private residence responding to a trespassing call. The police arrive to find multiple people on the property and there seems to be some sort of disagreement. They question who is who and find out that the occupants in possession of the property do have the rights to be there as is evidenced by a signed mutually accepted ____________:
Deed
Joint Tenancy Agreement
Lease
Title
Lease
56
Validity of a Lease:
In the State of Arizona, leases are recognized as being a form of a contract. Which of the following is not required for a lease to be considered valid?
Parties of Legal Age
Signed by all parties
Competent Parties
Start date and end date
Signed by all parties
57
Validity of a Lease:
o Sub-Leasing may NOT be _______allowed and as such would be written into the lease.
o NYC leases are now excluding lessee's from using services like AirBnB.
58
Sub-Leasing and Assignments of a Lease:
Sub-Leasing: The action taken when the current “lessee” becomes a “lessor” to a _______Third Party.
o Original Lessee is still responsible for original lease and terms to original lessor.
59
Sub-Leasing and Assignments of a Lease:
Sub-Leasing: The action taken when the current “lessee” becomes a “lessor” to a Third Party.
o Original Lessee is still ______ for original lease and terms to original lessor.
Responsible
60
Sub-Leasing and Assignments of a Lease:
*_______:SANDWICH Lease Where the lessee becomes lessor and sub-lessee will make payments to their lessor who will in turn make the payments to the original lessor
o Bank of A rents space from Bill Yates and outgrows their space
o Bank of A subleases space to Bank of B; Bank B pays Bank A who pays Bill Yates
o Lessees do this in markets where rent is rising dramatically, they profit.
61
Sub-Leasing and Assignments of a Lease:
*_______Assigning a Lease: Where the original “lessee” assigns their rights to a new “lessee”
o Lessee’s (the tenants) are changed but the terms of the original lease remain the same.
62
Sub-Leasing and Assignments of a Lease:
*_______Assigning a Lease:
o Original Lessee is relieved of primary responsibility but could still be held accountable if the assigned (new) lessee defaults on the terms of the lease
IMPORTANT: “On the Hook”
63
Sub-Leasing and Assignments of a Lease:
*_______Novation Of A Lease: The ‘substitution’ or either parties or contracts
IMPORTANT: You may see this in real life and it could be called a 'NOMINATION' clause where you can nominate someone else to take over your position.
64
Sub-Leasing and Assignments of a Lease:
*Novation Of A Lease: The ‘substitution’ or either parties or contracts
IMPORTANT: You may see this in real life and it could be called a '_______Nomination Clause where you can nominate someone else to take over your position.
65
Sub-Leasing and Assignments of a Lease:
*Novation Of A Lease:
o The original lessee or tenant is fully released from the contracts obligations
o The new lessee is held _______solely responsible for the terms of the lease.
IMPORTANT: “Off the Hook”
66
Sub-Leasing and Assignments of a Lease:
IMPORTANT:
_______Assignment Of A Lease: You are still liable if sub party defaults [ON THE HOOK]
67
Sub-Leasing and Assignments of a Lease:
IMPORTANT:
_______Novation Of A Lease: You are NOT liable if sub party defaults [OFF THE HOOK]
68
Terminating the Lease:
*To conclude a lease several options are available:
o _______Successful conclusion of all terms
o _______Landlord declares bankruptcy, foreclosure or other default action
o _______Government powers Ex. condemnation, forced sale, court ruling
o _______Both parties mutually agree to end the lease
o _______Destruction Ex. Fire, Earthquake, and Sinkhole etc.
o Sale or purchase of the unit from landlord before lease _______expiration
o _______Surrender and Acceptance: Where both parties can agree that at any point in time, the tenant can surrender their interests and vacate
Usually in good economic times where rent is higher and the existing tenant wishes to vacate early
69
Terminating the Lease:
*To conclude a lease several options are available:
o Successful conclusion of _______all terms
70
Terminating the Lease:
*To conclude a lease several options are available:
o Landlord declares bankruptcy, foreclosure or other _______default action.
71
Terminating the Lease:
*To conclude a lease several options are available:
o Government powers Ex. condemnation, forced sale, or court ruling.
o Both parties _______mutually agree to end the lease
72
Terminating the Lease:
o Destruction via _______Fire, Earthquake, Sinkhole, Flood, etc.
73
Terminating the Lease:
o Sale or _______purchase of the unit from landlord before lease expiration
74
Terminating the Lease:
o Surrender and Acceptance: Where both parties can agree that at any point in time, the tenant can _______surrender their interests and vacate.
Usually in good economic times where rent is higher and the existing tenant wishes to vacate early.
75
Terminating the Lease: Quiz:
Surrender and ____________ is a term used to describe when the tenant voluntarily moves out and neither the landlord nor the tenant will incur penalties.
Acceptance
76
Evictions and Breach of Contracts:
*_______Breach: Any party of is in default of a contract or agreement.
77
Evictions and Breach of Contracts:
*_______Constructive Eviction: Landlord Breaches contract, tenant can sue for damages
o Tenant also has LEGAL rights to leave the property if landlord has not maintained it
o Tenant must be able to prove that NOTICE was given to landlord and ignored.
78
Evictions and Breach of Contracts:
*Constructive Eviction: Landlord Breaches contract, tenant can sue for damages
o Tenant also has LEGAL rights to leave the property if landlord has not maintained it
o Tenant must be able to _______prove that NOTICE was given to landlord and ignored.
79
Evictions and Breach of Contracts:
*_______Actual Eviction:
Tenant Breaches contract, landlord can sue for damages
o Landlord must serve the tenant with a “FIVE DAY NOTICE” of default
o After service of 5 day notice, landlord or lessor can commence with lawsuit
o Tenants must vacate the property if found guilty in court
o If tenants do not vacate the property, they and possession can be removed by the sheriff.
80
Evictions and Breach of Contracts:
*Actual Eviction:
Tenant Breaches contract, landlord can sue for damages
o Landlord must serve the tenant with a “_______Five Day Notice” of default
o After service of notice, landlord or lessor can commence with lawsuit
o Tenants must vacate the property if found guilty in court
o If tenants do not vacate the property, they and possession can be removed by the sheriff.
81
Evictions and Breach of Contracts:
o IMPORTANT: Landlord Can NOT hold tenants possessions hostage in lieu of _______Rent by changing locks.
82
Evictions and Breach of Contracts:
o IMPORTANT:
o _______Distraint= Seizing a tenant’s property until full payment has been made
IMPORTANT: This is ILLEGAL in the State of Arizona.
83
Evictions and Breach of Contracts:
o IMPORTANT:
o You may sell a tenant's abandoned property after the legal notice period expires, and you may keep the proceeds to cover what the tenant owes you. But if the tenant's property has not been abandoned, Arizona law _______Forbids you from seizing it to cover back rent or other debts a tenant owes you,
If the tenant's property isn't abandoned, Arizona law forbids this and the landlord must store these possessions.
84
Evictions and Breach of Contracts:
o IMPORTANT:
IF the tenants don't respond, the landlord can file a _______Declaration of Abandonment
The landlord shall hold the tenant's personal property for a period of TEN DAYS after the landlord's declaration of abandonment.
The landlord shall use reasonable care in holding the tenant's personal property.
85
Evictions and Breach of Contracts:
o IMPORTANT:
IF the tenants don't respond, the landlord can file a Declaration of Abandonment
The landlord shall hold the tenant's personal property for a period of _______10 Days after the landlord's declaration of abandonment.
The landlord shall use reasonable care in holding the tenant's personal property.
86
Arizona Residential Leases
*Arizona specific REQUIREMENTS for leases to be valid:
1. Both parties must be over the age of _______18
2. Must have a _______start and end date (even if month to month)
3. Lease must be for _______legal purposes
4. If for _______MORE than a period of 1 year = MUST be in writing
5. If for _______LESS than a period of 1 year = COULD be verbal
6. Must be signed by both parties if for more than _______one year
7. Arizona written leases _______describe the property
8. Identifies _______when rent is owed as rent is paid in advance
9. Can not _______override Arizona Residential Landlord Tenant Act (ARLTA)or State or Federal Laws
10. Set’s rules and _______limitations on items like guests, occupancy, pets, etc.
87
Arizona Residential Landlord & Tenant Act:
*Most Leases in Arizona use the Residential Lease Agreement which outlines:
- Start and End date of the Lease
- Amount of Rents, Deposits and any other fees involved (Pets, Cleaning, Etc.)
- Outlines which _______party is responsible for property maintenance (Pool, Yard, Etc.)
- Includes the Tenants Bill of Rights.
88
______: In your bonus materials, once you reach the end of this course, you will find a copy of the Arizona Residential Landlord and Tenant Act. We have highlighted the most important areas there for you and you will NEED TO READ this guide to pass the exams!
Bonus
89
Arizona Residential Landlord & Tenant Act:
*The Tenant Advisory, is like the _______Buyers Advisory BUT it is ONLY used in leases.
90
Arizona Residential Landlord & Tenant Act:
*The Arizona Residential Landlord and Tenant Act (ARLTA) is part of the _______AZ Department of Housing and was created to ensure protections of both lessors and lessees and is Statutory Law.
91
Arizona Residential Landlord & Tenant Act:
*It is intended to cover most ‘_______dwelling units’ NOT commercial or industrial.
92
Arizona Residential Landlord & Tenant Act:
*The act main purpose is to _______improve the quality of housing and protect the public.
93
Arizona Residential Landlord & Tenant Act:
Who is NOT covered under the AZ Landlord Tenant Act?
1. _______Medical, Educational, Detention facilities, counseling and treatment facilities, religious and or social services facilities would not be covered.
2. _______Lease to own, rent to own or contract to buy tenants.
3. Occupancy by a member of a _______fraternal or social organization
4. _______Transient occupancy in a hotel, motel or recreational lodging
5. Occupancy by an _______employee of a landlord as a manager or custodian of storage units.
6. Occupancy by an _______owner of a condo unit or a holder of a proprietary lease in a cooperative
7. Occupancy in or operation of _______public housing
94
Arizona Residential Landlord & Tenant Act:
Who is NOT covered under the AZ Landlord Tenant Act?
1. Medical, Educational, Detention facilities, counseling and treatment facilities, _______religious and or social services facilities would not be covered.
95
Arizona Residential Landlord & Tenant Act:
Who is NOT covered under the AZ Landlord Tenant Act?
2. Lease to own, rent to own or _______contract to buy tenants.
96
Arizona Residential Landlord & Tenant Act:
Who is NOT covered under the AZ Landlord Tenant Act?
3. Occupancy by a member of a fraternal or _______social organization.
97
Arizona Residential Landlord & Tenant Act:
Who is NOT covered under the AZ Landlord Tenant Act?
4. Transient occupancy in a hotel, motel or _______recreational lodging.
98
Arizona Residential Landlord & Tenant Act:
Who is NOT covered under the AZ Landlord Tenant Act?
5. Occupancy by an employee of a _______landlord as a manager or custodian of storage units.
99
Arizona Residential Landlord & Tenant Act:
Who is NOT covered under the AZ Landlord Tenant Act?
6. Occupancy by an owner of a condo unit or a holder of a _______proprietary lease in a cooperative.
100
Arizona Residential Landlord & Tenant Act:
Who is NOT covered under the AZ Landlord Tenant Act?
7. Occupancy in or _______operation of public housing.
101
Arizona Residential Landlord & Tenant Act: Quiz
Choose the correct requirements for a lease to be considered 'valid':
Both parties must be over the age of 18
If leasing for more than a period of a year, can be verbal
If leasing for less than a year, must be in writing
Set rules and limits on items like guests, occupancy, pets, etc.
Both parties must be over the age of 18
Set rules and limits on items like guests, occupancy, pets, etc.
102
Arizona Residential Landlord & Tenant Act:
Case Study:
Q: How can a Lessee profit from a lease? What type of lease is this referred to as?
A: Where the lessee becomes lessor, and the sub-lessee will make payments to their lessor, who will, in turn, make the payments to the original lessor. Lessees do this in markets where rent is rising dramatically (they profit). It is called a Sandwich Lease.
103
Arizona Residential Landlord & Tenant Act:
Case Study:
Q: What’s the difference between Assigning a Lease and Novation?
A: Assigning a Lease is where the original “lessee” assigns their rights to a new “lessee.” The original Lessee is relieved of primary responsibility but could still be held accountable if the designated (new) Lessee defaults on the lease terms. It is “On the Hook”. However, the Lessee’s (the tenants) are changed, but the terms of the original lease remain the same. The original Lessee or tenant is fully released from the contract obligations. The new Lessee is held solely responsible for the terms of the lease. It is “Off the Hook”.
104
Arizona Residential Landlord & Tenant Act:
Case Study:
Q: Name one way a lease may be terminated other than the successful conclusion of all terms.
A: To conclude a lease, several options are available:
1. Landlord declares bankruptcy, foreclosure, or other default action;
2. Government powers (condemnation, forced sale, court ruling)
3. Both parties mutually agree to end the lease. 4. Destruction (Fire, Earthquake, Sinkhole etc)
5. Sale or purchase of the unit from the landlord before lease expiration.
6. Surrender and acceptance: Both parties can agree that at any point, the tenant can surrender their interests and vacate.
105
Arizona Residential Landlord & Tenant Act:
Case Study:
Q: Can a landlord (Lessor) hold their tenant’s (Lessee’s) personal property hostage for lack of payment in Arizona? What is this “practice” called?
A: Landlord Can NOT hold tenants' possessions hostage in place of rent by changing locks. Distraint is seizing a tenant's property until full payment has been made. It is ILLEGAL in the State of Arizona.
106
Arizona Residential Landlord & Tenant Act:
Quiz:
Under the Arizona Landlord Tenant Act who is responsible for making repairs?
The Tenant
Whoever is on the lease that was agreed to by both parties
The Landlord
The Property Manager or Property Management Company
Whoever is on the lease that was agreed to by both parties
107
Arizona Residential Landlord & Tenant Act:
Quiz:
Which of the following would not be covered under the Arizona Landlord Tenant Act?
Landlord renting out their house
Fraternity Housing
Low rent apartment complex
Multi-family housing managed by a licensed property
Fraternity Housing
108
Arizona Residential Landlord & Tenant Act:
Quiz:
John Deadbeat hasn’t paid his rent on time again. Landlord Biggy is tired of this and wants to evict. Biggy must serve a notice of default at least how many days before commencing of an eviction suit?
5 days
30 days
Immediately
1 day after rent is late
5 days
109
Arizona Residential Landlord & Tenant Act:
Quiz:
According to the AZ Residential Landlord Tenant Act, who must be written into the lease as a point of contact for tenant repairs?
Owners broker
A member of the LLC
An elected agent on behalf of owner or the owner
Only a licensed property manager
An elected agent on behalf of owner or the owner
110
Arizona Residential Landlord & Tenant Act:
Quiz:
A Sandwich Lease is?
Where the lessee becomes lessor and sub-lessee will make payments to their lessor who will in turn make the payments to the original lessor
Where the lessee becomes lessor and sub-lessee will make payments to their lessor who will in turn make the payments to the original lessor
Where the lessor agrees to a new tenant taking over the old tenants place as long as the old tenant is going to pay the difference in rent to the lessor.
Most commonly found in commercial spaces where two large anchors support the tenants in the middle of the complex.
Where the lessee becomes lessor and sub-lessee will make payments to their lessor who will in turn make the payments to the original lessor
111
Arizona Residential Landlord & Tenant Act:
Quiz:
Which of the following is not a way to terminate a lease?
Death of the Lessor
Fire Completely Destroys the Building
City Ordinance changes
Bankruptcy of the Lessor
Death of the Lessor
112
Arizona Residential Landlord & Tenant Act:
Quiz:
Seizing or Taking a Arizona residential tenants property and placing the items in safe storage until the lease has been paid is?
Demise and it is legal in the State of Arizona
Discord and is legal in the State of Arizona
Distraint and is illegal in the State of Arizona
Surrender and it is illegal in the State of Arizona
Distraint and is illegal in the State of Arizona
113
Arizona Residential Landlord & Tenant Act:
Protecting Families and Those With Children:
*It is illegal to discriminate or to refuse to rent to anyone on the basis of _______familial status.
114
Arizona Residential Landlord & Tenant Act:
Protecting Families and Those With Children:
*It is illegal to advertise in any form housing that does not allow children
o UNLESS–the property meets the definition of housing for _______older persons [55+].
115
Arizona Residential Landlord & Tenant Act:
Protecting Families and Those With Children:
*_______Civil Penalties can be enforced if landlord intentionally discriminated against these protected communities.
116
Arizona Residential Landlord & Tenant Act:
Landlord’s Obligations under the Landlord Tenant Act:
The LANDLORD is responsible for:
o Landlords may not collect more than1.5 x monthly rent in security _______deposits
o Landlord must inform the tenant in writing of the move out _______inspections and furnish the tenant with a move in and move out checklist
o Deposits, _______retainers of deposits and remedies are all outlined by Landlord
o Landlord or property manager must _______furnish the tenant with both a copy of the signed lease and a copy of the Landlord Tenant Act
117
Arizona Residential Landlord & Tenant Act:
Landlord’s Obligations Under The Landlord Tenant Act:
The LANDLORD is responsible for:
o Landlords may not collect more than _______1.5 x monthly rent in security deposits.
118
Arizona Residential Landlord & Tenant Act:
Landlord’s Obligations Under The Landlord Tenant Act:
The LANDLORD is responsible for:
o Landlord must inform the tenant _______in writing of the move out inspections and furnish the tenant with a move in and move out checklist.
119
Arizona Residential Landlord & Tenant Act:
Landlord’s Obligations Under The Landlord Tenant Act:
The LANDLORD is responsible for:
o Deposits, retainers of deposits and _______remedies are all outlined by Landlord.
120
Arizona Residential Landlord & Tenant Act:
Landlord’s Obligations Under The Landlord Tenant Act:
The LANDLORD is responsible for:
o Landlord or property manager must furnish the tenant with _______both a copy of the signed lease and a copy of the Landlord Tenant Act.
121
Arizona Residential Landlord & Tenant Act:
Landlord’s Obligations under the Landlord Tenant Act:
o The PROPERTY OWNER is responsible for:
Adhere to building and _______safety codes
Make any and all _______repairs necessary
Keep property in a _______clean and safe condition
IMPORTANT: Supply RUNNING water, including _______HOT water
Maintain both _______heating and AC systems dependent on season
UNLESS –the tenant is a lease to own, land contract, or agreements.
122
Arizona Residential Landlord & Tenant Act:
Landlord’s Obligations Under the Landlord Tenant Act:
o The PROPERTY OWNER is responsible for:
Adhere to _______building codes and safety codes.
123
Arizona Residential Landlord & Tenant Act:
Landlord’s Obligations Under the Landlord Tenant Act:
o The PROPERTY OWNER is responsible for:
Make any and _______all repairs necessary.
124
Arizona Residential Landlord & Tenant Act:
Landlord’s Obligations Under the Landlord Tenant Act:
o The PROPERTY OWNER is responsible for:
Keep _______property in a clean and safe condition.
IMPORTANT: Supply RUNNING water, including HOT water.
125
Arizona Residential Landlord & Tenant Act:
Landlord’s Obligations Under the Landlord Tenant Act:
o The PROPERTY OWNER is responsible for:
Maintain both heating and AC systems dependent on _______season.
UNLESS –the tenant is a lease to own, land contract, or agreements.
126
Arizona Residential Landlord & Tenant Act:
Landlord’s Obligations under the Landlord Tenant Act:
o According to the Arizona Residential Landlord and Tenant Act (AZRLTA), the owner or the _______owner’s agent MUST be listed in the lease as a point of contact for repairs, questions etc.
127
Arizona Residential Landlord & Tenant Act:
Tenant’s Obligations under the Landlord Tenant Act:
The TENANT is responsible for:
o Pay _______rents on time as outlined in the agreements
o Comply with all obligations primarily materially affecting health and _______safety
o Keep premises clean and safe as the condition of the premises _______permit
Dispose from all ashes, rubbish, garbage and other _______waste in a clean and safe manner
o Keep all plumbing fixtures as clean as their _______condition permits
o Use in a _______reasonable manner all electrical, plumbing, sanitary, heating, ventilating, A/C
128
Arizona Residential Landlord & Tenant Act:
Tenant’s Obligations under the Landlord Tenant Act:
The TENANT is Responsible for:
o Pay rents on time as outlined in the _______agreements.
129
Arizona Residential Landlord & Tenant Act:
Tenant’s Obligations under the Landlord Tenant Act:
The TENANT is Responsible for:
o Comply with all obligations primarily materially affecting _______health and safety.
130
Arizona Residential Landlord & Tenant Act:
Tenant’s Obligations under the Landlord Tenant Act:
The TENANT is Responsible for:
o Keep premises clean and safe as the condition of the premises permit.
Dispose from all _______ashes, rubbish, garbage and other waste in a clean and safe manner.
131
Arizona Residential Landlord & Tenant Act:
Tenant’s Obligations under the Landlord Tenant Act:
The TENANT is Responsible for:
o Keep all plumbing fixtures as clean as their condition permits.
132
Arizona Residential Landlord & Tenant Act:
Tenant’s Obligations under the Landlord Tenant Act:
The TENANT is Responsible for:
o Use in a reasonable manner Arizona Residential Landlord & Tenant Act:
Tenant’s Obligations under the Landlord Tenant Act:
The TENANT is Responsible for:
o Use in a reasonable manner ________ all electrical, plumbing, sanitary, heating, ventilating, A/C.
133
Arizona Residential Landlord & Tenant Act:
Tenant’s Obligations under the Landlord Tenant Act:
The TENANT is responsible for:
o Not ________ deliberately or negligently destroy, deface, damage, impair or remove any part of the premises or knowingly permit any person to do so.
o Conduct themselves and require other persons on the premises with their consent to conduct themselves in a manner that will not disturb their neighbors’ ________ peaceful enjoyment.
________ Promptly notify the landlord in writing of any situation or occurrence that requires the landlord to provide maintenance or make repairs.
134
Arizona Residential Landlord & Tenant Act:
Tenant’s Obligations under the Landlord Tenant Act:
The TENANT is Responsible for:
o Not ________ deliberately or negligently destroy, deface, damage, impair or remove any part of the premises or knowingly permit any person to do so.
135
Arizona Residential Landlord & Tenant Act:
Tenant’s Obligations under the Landlord Tenant Act:
The TENANT is Responsible for:
o Conduct themselves and ________ require other persons on the premises with their consent to conduct themselves in a manner that will not disturb their neighbors’ peaceful enjoyment.
136
Arizona Residential Landlord & Tenant Act:
Tenant’s Obligations under the Landlord Tenant Act:
The TENANT is Responsible for:
Promptly notify the landlord in writing of any situation or occurrence that requires the landlord to provide ________ maintenance or make repairs.
137
Arizona Residential Landlord & Tenant Act:
Effects of Foreclosure on Tenants under AZRLTA:
o If AFTER the foreclosure action was ________ INITIATED, the owner shall include written notice of possible foreclosure with the rental agreement (at time of lease signing)
o If AFTER a tenant has entered into an ________ AGREEMENT, owner shall provide the tenant with written notice within FIVE business days after receipt of the notice of trustee’s sale.
o If the OWNER FAILS to provide ________ NOTICE, the tenant may deliver a written notice and recover damages and obtain injunctive relief
138
Arizona Residential Landlord & Tenant Act:
Quiz:
What are some of the obligations of the tenant?
Adhere to building and safety codes
Pay rent on time as outlined in the lease
Free to disturb neighbors peaceful enjoyment
Make all necessary repairs
Adhere to building and safety codes
Pay rent on time as outlined in the lease
139
Arizona Residential Landlord & Tenant Act:
Tenants Bill of Rights:
o Tenants have the right to recover up to ________ 2X the amount withheld from a landlord if a court finds the lessor in breach of contract
o Tenant has the right to give notice to landlord of breach of lease if landlord ________ fails to provide the basic services outlined earlier
IMPORTANT: Tenant has rights to repair or replace things wrong with unit if landlord fails to do so at a cost not to exceed ________ $300 or 1/2 of a month’s rent and deduct from next month’s rent due
o Tenant has right to immediately break the lease if proof can be given that the tenant was a victim of ________ domestic abuse
o Tenant has right to break lease if ________ Military Duty change orders force a move
IMPORTANT: Tenant has a right to privacy and landlord must give ________ 2 days’ notice with intent to enter the property for repairs or inspections (unless in emergency).
*If you see ________ 48 hours for landlord entry notice, please know this is the same thing as 2 days notice!
140
Arizona Residential Landlord & Tenant Act:
Tenants Bill of Rights:
o Tenants have the right to recover up to ________ 2X the amount withheld from a landlord if a court finds the lessor in breach of contract.
141
Arizona Residential Landlord & Tenant Act:
Tenants Bill of Rights:
o Tenant has the right to give notice to landlord of ________ breach of lease if landlord fails to provide the basic services outlined earlier.
142
Arizona Residential Landlord & Tenant Act:
Tenants Bill of Rights:
IMPORTANT: Tenant has rights to repair or replace things wrong with unit if landlord fails to do so at a cost not to exceed $300 or ________ 1/2 of a month’s rent and deduct from next month’s rent due.
143
Arizona Residential Landlord & Tenant Act:
Tenants Bill of Rights:
o Tenant has right to ________ immediately break the lease if proof can be given that the tenant was a victim of domestic abuse.
144
Arizona Residential Landlord & Tenant Act:
Tenants Bill of Rights:
o Tenant has right to break lease if Military Duty ________ change orders force a move.
145
Arizona Residential Landlord & Tenant Act:
Tenants Bill of Rights:
IMPORTANT: Tenant has a right to privacy and landlord must give 2 days’ notice with intent to enter the property for repairs or inspections (unless in ________ emergency).
146
Arizona Residential Landlord & Tenant Act:
Tenants Bill of Rights:
*If you see 48 hours for landlord entry notice, please know this is the same thing as ________ 2 days notice!
147
Arizona Residential Landlord & Tenant Act:
Arizona Slum Laws:
o A unit is considered a “________ SLUM” when it is unsafe or unhealthy for habitation.
148
Arizona Residential Landlord & Tenant Act:
Arizona Slum Laws:
POOR or NO drinking water, faulty gas, heating, AC or electrical systems, faulty sanitation facilities, damaged or leaking roofs.
IMPORTANT: Arizona Law requires these issues be corrected by owner ________ immediately upon discovery.
149
Arizona Residential Landlord & Tenant Act:
Arizona Slum Laws:
o Arizona Law requires these issues be corrected by owner immediately upon discovery.
o Tenant can NOT be held ________ liable if the property is unsafe or unhealthy.
150
Arizona Residential Landlord & Tenant Act:
Arizona Slum Laws:
o Tenants can find alternate housing and sue for damages.
IMPORTANT: Tenants must ________ first notify owner of items needing repair and if unanswered, tenants may move out into temporary housing or break lease without penalty.
151
Arizona Residential Landlord & Tenant Act:
Arizona Slum Laws:
Bed Bug Control:
Applies to all rentals EXCEPT single family homes, a landlord is prohibited from renting premises known to be infested with bedbugs, and a tenant may NOT move into a rental with personal property harboring these pests.
landlords must have a licensed pest-control specialist inspect and treat the home within ________ SEVEN days of being notified about bed bugs by a tenant.
152
Arizona Residential Landlord & Tenant Act:
Arizona Slum Laws:
Bed Bug Control:
Applies to all rentals EXCEPT ________ single family homes, a landlord is prohibited from renting premises known to be infested with bedbugs, and a tenant may NOT move into a rental with personal property harboring these pests.
landlords must have a licensed pest-control specialist inspect and treat the home within SEVEN days of being notified about bed bugs by a tenant.
153
*A TENANT WHO KNOWS OF THE PRESENCE OF BEDBUGS SHALL PROVIDE THE LANDLORD WRITTEN OR ELECTRONIC NOTIFICATION OF THE PRESENCE OF BEDBUGS IN THE DWELLING UNIT WITHIN ________ THREE BUSINESS DAYS.
154
Arizona Residential Landlord & Tenant Act:
Arizona Slum Laws:
TRUE or FALSE:
Tenants can be held liable if the property is deemed unsafe / unhealthy.
True
False
False
155
Arizona Residential Landlord & Tenant Act:
Case Study:
Q: When is the only time that a landlord (lessor) may advertise that their property does not allow children?
A: It is illegal to advertise in any form housing that only allows children if the property meets the definition of housing for older persons.
156
Arizona Residential Landlord & Tenant Act:
Case Study:
Q: What rights under the ARLTA do tenants (Lessees) have when the property they are renting is foreclosed on without having received proper notice from the owner (Lessor)?
A: Under the ARLTA, if the owner fails to provide notice, the tenant may deliver a written statement to recover damages and obtain injunctive relief.
157
Arizona Residential Landlord & Tenant Act:
Case Study:
Q: What is the purpose of the Tenants Bill Of Rights?
A: Tenants Bill Of Rights defines and protects the rights of Lessees.
158
Arizona Residential Landlord & Tenant Act:
Case Study:
Q: What is a “Slum,” and what obligations does the owner have when this definition has been met?
A: A unit is considered a “slum” when it is unsafe or unhealthy for habitation. Poor or no drinking water, faulty gas, heating, AC or electrical systems, wrong sanitation facilities, damaged or leaking roofs. Arizona Law requires these issues to be corrected by the owner immediately upon discovery.
159
Arizona Residential Landlord & Tenant Act:
Quiz:
In which of the following cases could a tenant located in Arizona legally break their lease, and in addition, are owed all of their deposits?
Job Transfer
Work Related Injury
Diagnosed with a terminal illness
Victim of domestic abuse
Victim of domestic abuse
160
Arizona Residential Landlord & Tenant Act:
Quiz:
What constitutes a property as a slum in Arizona?
Leaking window
Lack of drinking water
A property with that doesn't have air conditioning
Door that won’t shut and lock properly
Lack of drinking water
REMEMBER: Think about this, not all homes in AZ have AC, some in Flagstaff don't, homes on the reservations don't and in many cases, older homes still don't!
161
Arizona Residential Landlord & Tenant Act:
Quiz:
The Smart Family moved into a rental house on March 5th after signing a lease for 1 year. On July 13th, the landlord was served with a notice of foreclosure. In Arizona, when is the last day that the landlord must notify the Smart Family?
July 16
July 18
July 31
June 1
July 18 [5 DAY NOTICE]
162
Property Management:
*Duties of a Property Manager:
o Property managers are used to locate ________ tenants on behalf of owner.
o Run credit and background checks on ________ prospective tenants.
o ________ Collect any rents, security deposits and other fees.
o Provide move in and move out checklists and ________ inspections.
o Aid in the repairs and overall maintenance of the unit on behalf of the ________ owners.
163
Property Management:
*Duties of a Property Manager:
o Property managers are used to locate tenants on behalf of ________ owner.
164
Property Management:
*Duties of a Property Manager:
o Run credit and ________ background checks on prospective tenants.
165
Property Management:
*Duties of a Property Manager:
o Collect any rents, security ________ deposits and other fees.
166
Property Management:
*Duties of a Property Manager:
o Provide move in and move out ________ checklists and inspections.
167
Property Management:
*Duties of a Property Manager:
o ________ Aid in the repairs and overall maintenance of the unit on behalf of the owners.
168
Property Management:
Property Management Contracts:
o IMPORTANT: Must be in ________ writing in the State of Arizona.
o IMPORTANT: Must have a ________ start and end date.
o Must establish a ________ reporting and accounting system.
o Must be a licensed real estate agent employed by a Licensed Broker in the ________ State of Arizona.
o Must have all terms including ________ cancellation policies outlined and detailed in the agreement.
o IMPORTANT: Any monies received must be placed into a ________ trust account on behalf of the owner.
IMPORTANT: Trust Accounts must be kept current and reflect an ________ accurate balance.
169
Property Management:
Property Management Contracts:
o IMPORTANT: Must be in writing in the ________ State of Arizona.
170
Property Management:
Property Management Contracts:
o IMPORTANT: Must have a start and ________ end date.
171
Property Management:
Property Management Contracts:
o Must establish a reporting and ________ accounting system.
172
Property Management:
Property Management Contracts:
o Must be a licensed real estate agent employed by a ________ Licensed Broker in the State of Arizona.
173
Property Management:
Property Management Contracts:
o Must have all ________ terms including cancellation policies outlined and detailed in the agreement.
174
Property Management:
Property Management Contracts:
o IMPORTANT: Any monies received must be placed into a trust account on behalf of the owner.
IMPORTANT: Trust Accounts must be kept current and reflect an accurate ________ balance.
175
Property Management:
Referrals and Commissions:
o IMPORTANT: A property management firm or a property owner May pay a finder’s fee of a maximum of ________ five (5) times within a twelve (12) month period to a tenant in an apartment managed by the firm or owned by the owner.
o May not pay a finder’s fee exceeding a *$200* credit toward or reduction in the tenant’s monthly rent. (A MAXIMUM of $1000 per year pertinent in referral credits).
176
Property Management:
Referrals and Commissions:
o IMPORTANT: A property management firm or a property owner May pay a finder’s fee of a maximum of five (5) times within a twelve (12) month period to a tenant in an apartment managed by the firm or owned by the owner
o May not pay a finder’s fee exceeding a ________ *$200* credit toward or reduction in the tenant’s monthly rent. (A MAXIMUM of $1000 per year pertinent in referral credits).
177
Property Management:
Records and Retention:
o Management firms must keep accurate records and recording for all owners Including:
IMPORTANT: Bank statements, receipts, deposit slips and canceled checks
________ Receipts and disbursement journals
Owners statements and client ledgers
178
Property Management:
Records and Retention:
o Management firms must keep accurate records and recording for all owners Including:
IMPORTANT: Bank statements, receipts, deposit slips and canceled checks
Receipts and disbursement journals
________ Owners statements and client ledgers
179
Property Management:
Records and Retention:
o Management ________ agreements must be consecutive or in an “orderly, easily accessible ”system".
180
Property Management:
Records and Retention:
o IMPORTANT: Rental agreements must be kept for a period of ________ *1 Year(s)* from expiration.
181
Property Management:
Records and Retention:
o Financial records must be kept for a period of ________ *3 Years* from execution date.
182
Property Management:
Leasing Terms:
o ________ Building shell:
A builder can build to suit a new owner or can lease a shell only whereby the tenant would be responsible for their build out including flooring, plumbing, electrical etc. This can be ideal for a specialty tenant
183
Property Management:
Leasing Terms:
________ Expense Stop:
A fixed amount (typically per square foot) in a lease where the tenant is responsible for all building operating expenses and taxes in excess of said amount.
184
Property Management:
Leasing Terms:
________ Turnkey project:
The space being rented or purchased is ready to move into
185
Property Management:
Leasing Terms:
________ Anchor Tenant:
A large tenant who would usually be an asset to the rest of the junior tenants
Ex. A Grocery store would attract new clients to a small nail salon next door.
186
Property Management:
Leasing Terms:
________ Short Term/Vacation Rentals:
Air BNB, HomeAway and other internet sites are a great concept but in many parts of the country, owners are finding it harder and harder to accommodate new regulations from both private or government bodies.
187
Property Management:
Leasing Terms:
________ Section 8:
Federal government's program for assisting very low-income families, the elderly, and the disabled to afford housing in the private market. The participant is free to choose any housing that meets the requirements of the program and is not limited to units located in subsidized housing projects.
188
Property Management:
Quiz:
Choose the correct statements about record keeping and rental agreements:
Must keep accurate records for all owners
Must be in an orderly and easily accessible system
Rental agreements must be kept for 1 year from expiration
Financial records must be kept for 5 years from expiration
Must keep accurate records for all owners
Must be in an orderly and easily accessible system
Rental agreements must be kept for 1 year from expiration
189
Property Management:
Case Study:
Q: What is the role of a Property Manager? As a real estate agent (working for a broker), will you qualify to act as a Property Manager?
A: The role of a property manager is to locate tenants on behalf of the owner, run credit and background checks on prospective tenants, and collect any rents, security deposits, and other fees. Finally, provide move-in and move-out checklists and inspections and aid in the repairs and overall maintenance of the unit on behalf of the owners. Yes, the Property Manager must be a licensed real estate agent employed by a Licensed Broker in the State of Arizona.
190
Property Management:
Case Study:
Q: Can a Property Manager pay a finder’s fee to a tenant? If so, what are some restrictions?
A: YES. A property management firm or a property owner CAN pay a finder’s fee of a maximum of five (5) times within twelve (12) months to a tenant in an apartment managed by the firm or owned by the owner. They may NOT pay a finder’s fee exceeding a $200 credit toward a tenant’s monthly rent reduction. (A Maximum of $1000 per year per tenant in referral credits).
191
Property Management:
Case Study:
Q: Money received by a Property Manager on behalf of the property owner must be placed into what type of account?
A: Any monies received must be placed into a trust account on behalf of the owner.
192
Property Management:
Case Study:
Q: How long must a property manager keep rental agreements? What about financial records?
A: Rental agreements must be kept for one year from expiration, and financial records must be kept for three years from the execution date.
193
Property Management:
Case Study:
The landlord of an apartment just signed a lease for a period of 12 months at a rate of $1400 per month. The maximum amount that the landlord can collect in the form of security deposits is?
$1400
$2100
$2800
$1000
$2100
194
Property Management:
Case Study:
A Property Manager is responsible for all of the following except?
Running credit checks on prospective tenants
Collecting Rents
Paying referrals to anyone who brings in new tenants
Aiding in overall maintenance of unit(s)
Paying referrals to anyone who brings in new tenants
195
Property Management:
Case Study:
A Broker has a staff of 6 property managers and 2 assistants. One of her managers just signed a lease for 15 years on a commercial space in Downtown Flagstaff to Northern Arizona University that expires on December 31, 2034. How long must she keep all copies of that lease on file in the State of AZ?
Till the end of 2035
One year after the lease was written
Till the end of 2034
The date that the lease expires
Till the end of 2035
196
Property Management:
Case Study:
Snobby Bobby has rented out his store front to Sun Ski and Sky LLC and is charging a base rent of $2500/month and an additional rent in the amount of 3% of gross sales. Over 3 months, Sun Ski and Sky LLC had gross sales of $66,000. What was the total of the rent paid to Snobby Bobby?
$7500
$7500 + $1950
$9,480
$8,480
$9,480
197
Leasing Math:
Investor Bob owns a 40 unit apartment building. There are 20 2 bed units, 10 1 bed units and 10 studios. The rents on the 2 bed units are $900 per month, 1 bed room units are $650 and the studios rent for $500 per month. If Bob has a 15 % vacancy and no debt, what will the gross rent be per year?
*20 units x 900 month =$18,000
*10 units x 650 month =$6,500
*10 units x 500 month =$5,000
$18,000 + $6,500 + $5,000 = $29,500
$29,500 monthly rent x 12 months = $354,000 yearly rental income
*$354,000 x .85 (.85 = 100%-15% vacancy rate) = $300,900
ANSWER:
$300,900 gross rent per year
198
Leasing Math:
A commercial building is offered for rent by a commercial real estate broker at an advertised rate of $9/sqft. The building has a total of 11,400 sqft. What is the monthly rent due?
*11,400 sqft x $9.00 = 102,600 (yearly)
*102,600 ÷ 12 = $8,550
ANSWER:
$8,550 rent due
199
Leasing Math:
Dynamo Inc rents out space in their mall in Sedona. They rented out a space to Sedona RentaWrecks. Their lease states rent of $1000/month in addition to a 3% supplement on all sales. Over the course of one year, RentaWrecks had monthly sales that averaged $36,000.What was the total annual rent RentaWrecks paid to Dynamo Inc?
*$1000/month x 12 months =$12,000
*$36,000/month sales x 12 months = $432,000
*$432,000 x .03 (3%) =$12,960(supplemental rent over the year)
*$12,000 rent + $12,960 supplement = $24,960
ANSWER:
$24,960 annual rent
200
Leasing Math:
Malibu Jeans Co agrees to pay $5.50/sqft in base rent to Oceanside Properties for their 2,100sqft bank/per month. In addition, they agree to pay 4.5% supplement on sales over$600,000 per year. The store had sales of $722,000 for the year. What was the total rent paid to Oceanside Properties for the year?
*$5.50 x 2100sqft = $11,550/month
*$11,550x 12 months =$138,600 yearly rent
*$722,000-$600,000 = $122,000
*$122,000 x .045 (4.5%) =$5,490
*$138,600 + $5,490 = $144,090
ANSWER:
$144,090 total rent paid
201
Leasing Math:
Brokers Jones is getting a 7% commission from the owner of a strip mall for leasing all the units. If he was paid $13,280, what was the total amount of all the leases?
*$13,280 ÷ .07 = $189,714
ANSWER:
$189,714 for all leases
202
Leasing Math:
Agent Alex gets a bonus of 2% for any rental he negotiates on apartments above $1000 per month. His current commission rate is 5% for all units under a $1000. If he rents 6 units at$850, 2 units at $950 and 1 unit at $1110, what is his total commission?
*$850 x 6 = $5100
$5100 x .05 =$255
*$950 x 2 = $1900
$1900 x .05 =$95
*1110 x 1 = $1110
$1110 x .07 =$77.70(.07 = .05 rate + .02 bonus)
*$77.70 + $95 + $255 = $427.70
ANSWER:
$427.70 total commission
203
Leasing Math:
Wabash Grocery has a lease on a 6500sqft Building for $6/SqFt and 2.5% of all monthly sales. The store averages $12,000 per month in sales. Next year, the landlord has increased the rent to $7/sqft and 2.25% of all monthly gross sales. Assuming the sales stay the same, what will the average monthly rent be for next year?
*6500sqft x $7 = $45,500 (yearly rent)
*$45,500 ÷ 12 =$3,792(monthly rent)
*$12,000 x .0225 =$270
*$3792 + $270 = $4062
(The first half of the question is useless noise, as we don’t care about what they were paying, only what they will be paying next year at the new rates)
*$4,062 average monthly rent next year
