Unit 17: Leases

Question 1

A lease is a contract that transfers __________ and use of the property, lasts for a _________ period, and is made in return for consideration (possession and payment).

Answer 1

possession, specified, consideration

Question 2

The statute of frauds in most states requires that leases for more than one year be in writing to be ___________. The lessor has a reversionary right to possession of property when a lease expires.

Answer 2

enforceable, reversionary

Question 3

Leases: An estate for years (tenancy for years) continues for a ________ period. A ________ tenancy may be created when a tenant with an estate for years stays on after the lease term expires and the landlord _______ rent payment.

Answer 3

definite, holdover, accepts

Question 4

Leases: An estate from period to period (periodic tenancy) has no ________ expiration date, but rent is payable at ________ intervals and the lease term has continuity because it automatically renews. A month-to-month tenancy is a common form of residential lease.

Answer 4

specific, definite

Question 5

Leases: An estate at will (tenancy at will) has no specified _______ term, is created by _______ agreement or operation of law, and can be terminated by the landlord or the tenant at any time on proper notice.

Answer 5

initial, express, proper

Question 6

Leases: An estate at sufferance (tenancy at sufferance) is created when the tenant stays on without the landlord’s _______ after termination. The landlord’s __________ of rent creates a holdover tenancy, or the landlord can treat the tenant as a trespasser and begin ________ proceedings and an action for damages under state law.

Answer 6

consent, acceptance, eviction

Question 7

A valid lease requires parties with CLOAC (C_______ to contract, L____ objective, O____ and A_________, and valid C____________).

Answer 7

Capacity to contract, Legal objective, Offer and Acceptance, and valid Consideration

Question 8

A lease typically includes a ___________ of leased premises, implied ________ of quiet enjoyment and a nondisturbance clause, ___________ on tenant’s use of the property and the ____ (length) of the lease, security deposit that must comply with state law, and a statement as to whether ____________ may be made by the tenant.

Answer 8

description, covenant, limitations, term, improvements

Question 9

Fixtures installed by a tenant generally become the landlord’s property unless they are removable _____ fixtures.

Answer 9

trade

Question 10

Federal fair housing law requires the landlord to allow a tenant with a disability to make __________ modifications to the premises.

Answer 10

reasonable

Question 11

The Americans with Disabilities Act (ADA) requires that commercial nonresidential property be free of ________ or that reasonable accommodations be provided.

Answer 11

barriers

Question 12

A typical lease will also include a provision that ___________ of premises will be performed by the landlord in compliance with state law; whether or not an __________ of the lease will be permitted, and if so, whether it will relieve the tenant of further obligation to the landlord; and whether or not a ________ will be permitted and under what terms.

Answer 12

maintenance, assignment, sublease

Question 13

Recording of the lease may be required by state law. An option may give the tenant the right to _____ the lease, the right to ________ the leased property, or the right of first _______ if the landlord decides to sell the property.

Answer 13

renew, purchase, refusal

Question 14

A _____ lease requires the tenant to pay rent and the landlord to pay the expenses of ownership, such as taxes, insurance, and maintenance.

Answer 14

gross

Question 15

A ___ lease requires the tenant to pay rent plus all or most property expenses, with the landlord also paying some property expenses.

Answer 15

net

Question 16

In a __________ lease, the tenant pays rent plus a percentage of gross sales and may pay property expenses.

Answer 16

percentage

Question 17

A ________ lease allows an increase in rent during the lease period. A _________ lease states specific rent increases. An _____ lease allows rent changes (up or down) based on the consumer price index or other indicator.

Answer 17

variable, graduated, index

Question 18

A ______ lease involves separate ownership of land and buildings.

Answer 18

ground

Question 19

In a lease ________, part of the rent may be applied to the purchase price. A sale-and-leaseback allows the original owner to use the property as a ______ while freeing up capital for other business purposes.

Answer 19

purchase, tenant

Question 20

The remedies for breach of a lease are governed by _____ law.

Answer 20

state

Question 21

In the event of a contract breach, the landlord may bring suit for __________ (actual eviction), or the tenant may claim a ____________ eviction if the premises are uninhabitable.

Answer 21

possession, constructive

Question 22

The U______ R__________ L_______ and T_____ Act (URLTA) has been adopted by many states in whole or in part and was updated in 2015.

Answer 22

Uniform Residential Landlord and Tenant Act

Question 23

Federal ____ _______ and _____ _____ laws affect landlords and tenants just as they do sellers and purchasers.

Answer 23

fair housing, civil right

Question 24

A leasehold is generally considered ________ property.

Answer 24

personal

Question 25

T/F: A one-year lease is an example of an estate from period to period.

Answer 25

True. A periodic tenancy is created initially to run for a definite amount of time, such as month to month, week to week, or year to year, but the tenancy continues indefinitely until proper notice of termination is given.

Question 26

A nondisturbance clause is included in the financing instrument used to mortgage leased premises. By accepting this provision, the mortgagee agrees not to _________ the tenancy of the lessee(s), so long as the lessee is _______ in payment of the required rent, should the mortgagee foreclose on the mortgagor’s building.

Answer 26

terminate, current

Question 27

Leases for entire commercial and industrial buildings and the land on which they are located, ground leases, and long-term leases are usually ___ leases.

Answer 27

net

Question 28

A lease usually does NOT terminate if the parties ___ or if the property is ____. Two exceptions: ____ estate lease and tenancy at ____.

Answer 28

die, sold, life, will

Question 29

Does a property manager, acting on behalf of the owner, have the right to enter an apartment when the tenants aren’t there, to check on any possible activity in violation of the lease?

Answer 29

No. The property manager cannot enter the apartment just to check on the activities of the residents. The tenants are entitled to the quiet enjoyment of the premises, which means that the landlord (or the landlord’s agent, the property manager) may enter the apartment only with the tenants’ permission, in an emergency, or in other cases stipulated in the lease.