Unit 17 - Leases Flashcards
(33 cards)
Leasehold Estates are
A tenant’s right to possess real estate for the term of the lease is a leasehold estate (less than freehold estate)
What is a Estate for Years
Has a definite time.
Specific starting and ending date
No Notice Required
Has right to use the premises for the entire lease term even if the lessor dies or the property is sold unless the lease states otherwise
Estate from Period to period…
What is required in Estate from Period to period in Colorado?
Also called a periodic tenancy
is created when a lessor and lessee enter into an agreement for a period of time.
The month to month continues under the original lease terms until one of the parties gives notice to terminate.
In Colorado:
for Lessee and Lessor must give a notice (one month notice) in writing
Periodic tenancy is also called
Estate from Period to Period
Estate from Period to Period is also called
Periodic Tenancy
What is an Estate at Will?
No period of time until terminated by either party with a proper notice
What is an Estate at Sufferance:
Occurs when a tenant continues with possession of real property without the landlord’s consent.
Can also be created by operation of law when a borrower continues in possession after a foreclosure sale.
A landlord can treat a tenant as a trespasser and proceed with an eviction and damages action.
The landlord can accept rent offered by the tenant which creates a new tenancy under conditions of the original lease – a holdover tenancy.
The landlord can treat the tenant as a tenant in sufferance by either objecting to the tenant holding over creating a month to month tenancy
A lease is a contract and therefore requires:
Capacity to contract
Legal Objectives
Offer and acceptance
Consideration
(studying on the unit about Contracts may help)
Possession of Premises:
Lessee may take possession of the premises and the landlord guarantees that he or she will not interfere in the tenant’s possession or use of the property – Right of Quiet Enjoyment.
Use of Premises:
A lessor may restrict the lessee’s use of the premises through provisions in the lease.
Term of Lease:
The period for which the lease will run stated precisely with an beginning and ending date.
Security Deposit:
Money held by the lessor during the term of the lease in case the tenant defaults on payment of rent or destroys the premises.
Improvements:
Neither the landlord nor the tenant is required to make improvements to the leased property.
The tenant, with the lessor’s permission, may make improvements to the property which become the landlords property.
Maintenance of Premises:
Lesssor is required to maintain the dwelling unit in a habitable condition. The tenant is not required to make repairs and is required to return the property in the same condition as when received, normal wear and tear accepted.
Destruction of Premises:
A tenant is not required to continue rent payments for apartment, office or commercial space if the leased premises are destroyed.
If the property is destroyed through the tenant’s negligence, the landlord can recover damages.
Assignment and Subleasing:
A lease is assigned when a tenant transfers all of their leasehold interests to another person who is legally oblgated for all of the promises in the original lease.
When a tenant transfers less than all of the leasehold interests by leasing them to a new tenant. The new tenant is only responsible to the original tenant to pay rent due and the original tenant remains responsible for rent and any damages to the property.
An assignment or sublease do not relieve the original lessee of the obligations to pay rent. Most leases prohibit assignment or subleasing without the landlord’s consent but the lessor generally cannot withhold consent unreasonably.
Recording a Lease:
Possession of the leased premises is considered constructive notice of the lessee’s leasehold interest and therefore recording a lease is generally considered unnecessary.
Non-disturbance Clause:
A mortgage clause that states the mortgagee agrees not to terminate the tenancies of lessees who pay their rent in the event the mortgagee forecloses on the property.
This is often used with commercial leases.
What are the 2 Options:
Renewal Option
Lease Option
Renewal Option:
a lease containing a clause that grants the lessee the privilege of renewing the lease.
The lessee must give notice that they are exercising this option.
Lease Option:
A lease granting th lessee the option to purchase the leased premises at a predetermined price within a certain period of time
A tenant may be given a right of first refusal to purchase the property over another party if such right is granted in the lease agreement.
Types of Leases
Gross Lease: Net Lease: Percentage Lease: Other types of Leases: Notes:
Gross Lease:
The tenant pays a fixed rental amount and the landlord pays the taxes, insurance, repairs and some/all utilities.
Typically the lease found in residential property
Net Lease:
The tenant pays all or some of the property charges in addition to the rent.
The monthly rental is net income for the landlord after operating expenses.
A triple net or net-net-net lease required the tenant to pay all operating and other expenses in addition to periodic rent.
