Real Estate – Ch 10 – Leases – Flashcards
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Assignment
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one of the parties transfers rights or interests under a contract to another person.
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Bilateral Contract
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Each party makes a binding promise to the other.
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Breach of Contract
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Occurs when one party to a contract fails to perform with no legal cause.
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Buyer Agency Agreement
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Agency contract between a buyer and a real estate broker providing the details of their agreement, including how the broker will be compensated for representing the buyer in the purchases or leases of a property.
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Can a minor void a contract with an adult?
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Yes. When an adult enters into a contract with a minor, the contract is voidable by the minor only.
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Conditions or Contingency Clauses
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Contract provisions that make the parties' rights or obligations dependent on the occurrence (or nonoccurence) of certain events.
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Constructive Eviction
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A tenant is prevented from the quiet enjoyment of the property due to lack of heat or plumbing (owner's negligence) and tenant vacates the property.
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Contract
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An agreement between two or more parties to do, or not to do something.
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Cooperative Apartment Purchase and Contract
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Buildings owned by corporations with the residents as shareholders who each receive a proprietary lease on an individual unit and the right to use common areas.
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Covenant of Quiet Enjoyment
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The property cannot be interrupted or invaded by anyone, including the property owner, without the lessee's consent. Must give 24 hr. notice to enter tenants apartment.
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Does a Lease Need to Be in Writing?
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No, an oral lease for less than less than one year is generally enforceable. Leases longer than a year must have the terms listed in writing to comply with the statute of frauds.
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Does a Lease Terminate when the Property is Sold or One Party Dies?
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No, the heirs or new owner must honor the existing lease contracts.
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Earnest Money Deposit
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An inducement to have the buyer's offer accepted and a means of showing the seller the buyer is serious and able to follow through with purchase.
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Escape Clause or Kickout Clause
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The seller can request an escape clause in the contract to allow them to pursue other buyers. Typical 48hour or 72hours from the signing of the contract.
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Estate at Will
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A leasehold estate that does not have a lease to specify the termination date and rental period. Unlike the estate for years or the periodic estate, an estate at will automatically terminates when either the landlord or tenant dies.
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Estate for Years
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A leasehold estate set to last for a specific period, after which it automatically terminates.
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Eviction
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Forced removal by legal means of a tenant and the tenant's belongings.
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Express Contract
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An agreement expressed in words, either spoken or written.
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Genuine Assent
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Consent must be freely given to create a binding contract.
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Graduated Lease
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Describes in detail the rent increases (or decreases) generally paid in installments. Example is a long term lease that spells out annual rent increases.
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Implied Contract
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An agreement that has not been put into words, but is implied by actions of the parties.
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Index Lease
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rent tied to a common index indicator such as consumer price index.
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Installment Sales Contract/Land Contracts
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agreements for which the buyer makes payments tot he seller in exchange for the right to occupy and use the property, but no deed or title is transferred until all, or a specified portion of, payments have been made. The seller holds title to the land as security.
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Land Lease/Ground Lease
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tenant leases unimproved land on a long term basis; typically included a provision that the tenant will construct a building on the property which the tenant will own upon completion.
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Lease
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Contract between a landlord and a tenant stipulating the terms of tenancy, rent, and tenant's rights and obligations.
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Leases
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Contracts in which one party (the lessee) pays the property owner (the lessor) rent in exchange for the possession of real estate.
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Legal Competency or contractual capacity includes what?
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Legal age of majority (18 years old).
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Liquidated Damages
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Reflects the amount of money specified in a contract to be awarded (to the seller) in the event the agreement is breached. Typical the down payment
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Listing Agreement
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Agency contract between a seller and a real estate broker stipulating the details of their agreement, including the broker's commission.
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Material Breach
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Breach of contract important enough to excuse the non-breaching party from performing any contractual obligations.
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Mutual Agreement
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Offer and acceptance. This indicates a meeting of the minds.
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Net Lease
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The tenant pays some or all of the expenses associated with the property taxes, insurance, and maintenance in addition to rent
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Novation
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the substitution of a new contract for an earlier contract."
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Option to Buy or Lease
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Contract that gives one party the right to buy or lease the property of another at a specific price within a specified time frame.
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Option to Renew
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Sets forth the renewal methods and terms of the new lease.
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Options
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Contracts that give one party the right to do something without obligating him to do so. A unilateral contract.
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Percentage Lease
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The tenant pays a percentage of gross sales on the premises, often in addition to a fixed monthly rental payment. Most commonly used for retail tenants.
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Periodic Estate
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A leasehold estate that continues for successive equal periods of length until terminated by proper notice (not less than 30 days) from either lessor or the lessee. The tenancy automatically renews itself at the end of each period until one party terminates it.
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Property Condition Disclosure Statement
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Failure to provide this document results ina credit of $500 to the buyer at closing.
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Right of First Refusal
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Right to have the first chance to buy or lease property if the owner decides to sell or lease.
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Sales Contracts
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Contracts in which a seller promises to convey title to real property to a buyer in exchange for the purchase price.
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Sales or Purchase Contract
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Contract between a buyer and seller detailing the sale of real property.
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Security Deposit
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Money the tenant pays to the landlord that provides monetary security in case of damages to the residence or failure by the lessee to comply with the lease agreement.
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Specific Performance or Forces Sale
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A legal remedy in which a court orders someone who has breached a contract to perform as agreed, rather than simply paying damages. The buyer benefits.
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Statute of Frauds
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Law requiring certain types of contracts to be in writing and signed to be enforceable.
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Sublease
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When a tenant transfers only part of his right of possession or other interest in leased property to another person for part of the remaining lease term.In a sublease, the original tenant or lessee is responsible to the the owner for all provisions in the lease.
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Substantial Performance
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A promisor does not perform all contractual obligations but does enough so that the promise is required to fulfill his or her obligation.
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Tenancy at Sufferance
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Possession of property by a tenant who came into possession of the property under a valid lease but stays on after the lease expires without the landlord's permission. This is not a leasehold estate.
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Types of Leasehold Estates
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Estate for years, Periodic Estate, and Estate at Will
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Unilateral Contract
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Only one party makes a binding promise to the other.
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What are the Types of Commercial Leases
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Net Lease, Percentage lease, land/ground lease, index lease, graduated lease
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Gross Lease
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the tenant pays a fixed rent while the owner or landlord pays all ownership expenses.
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What is the purpose of the "Time is of the Essence" clause?
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The purpose of this phrase is to emphasize timely performance as an essential part of the contract, and failure to perform on a time is a material breach.
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What is the rule of Parol Evidence?
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The rule of parol evidence provides that the written agreement overrides any oral agreement.
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When is a contract formed?
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When an offer is accepted, a contract is formed, and both parties are legally bound.
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A lease contract is best described as
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a conveyance of a possessors interest.
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When a tenant acquires a leasehold estate through a lease, what does the property owner acquire?
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Leased fee estate
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When an owner leases her property, she temporarily relinquishes the right to
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occupy the property
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Which of the following happens when a leased property is sold?
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The buyer acquires title subject to the lease.
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A landlord and tenant complete a one-year lease. The following week, the landlord dies. Which of the following is true?
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The tenant must continue to abide by all lease terms.
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If a lease does not state a specific ending date, when does it terminate?
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When either party gives proper notice
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In accordance with the Statute of Frauds,
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a five-year lease must be in writing to be enforceable.
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What is one important difference between a sublease and a lease assignment?
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In a sublease, the original tenant retains primary responsibility for performance of the original lease contract.
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Which of the following lease types conveys rights other than the rights to exclusive use and occupancy of the entire property?
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A rights lease
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An owner leases a property to a business in exchange for rent. The tenant is required to pay all operating expenses as well. This is an example of a
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net lease
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The percentage lease is most often used by
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retail landlords
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Which of the following summarizes the general terms of a ground lease?
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The tenant leases the ground from the landlord and owns the improvements.
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Among the usual remedies available to the injured party if tenant or landlord defaults on the terms of a lease is the right to
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sue to compel performance of the contract.
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A lease automatically terminates under which of the following circumstances?
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The leased property is foreclosed.
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One of the aims of the Uniform Residential Landlord and Tenant Act is to
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discourage the use of unfair and overly complex leases.
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A primary theme of the Uniform Residential Landlord and Tenant Act is that both landlord and tenant
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bargain with each other in good faith.
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The adult does not have the power to disaffirm the _________________.
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contract made with a minor
