Leases and Clauses

powers are duties of commission

1. determining the standards for qualification and eligibibility of applicants for licensure 2. conducting disciplinary hearings on alleged violations of this chapter and regulations promulgated under this chapter and deciding disciplinary actions as provided in this chapter for this found in violation 3. recommending changes in legislation and promulgating regulations governing the real estate industry relative to the protection of the safety and welfare of the public 4. establishing a fee schedule through regulation

exemptions to protected classes

1. owner-occupied smaller buildings (four units or fewer) 2. single family housing sold or rented without using a real estate agent 3. housing that is owned or operated by organizations and private clubs that limit occupancy to members 4. do not use discriminatory advertising

exclusions from the residential landlord & tenant act

1. residents ast public or private institutions (medical geriatric, educational, counseling, religious) 2. occupancy under a contract of sale of a dwelling unit or the property of which it is a part, if the occupant is the purchaser or a person who succeeds to his interest 3. occupancy by a member or a fraternal or social organization 4. transient occupancy in hotel, motel, or other accommodations subject to sales tax 5. occupancy by an employee of a landlord who's right to occupancy is conditional upon employment and about the premises 6. occupancy by an owner of a condo unit or a holder of a proprietary lease in a cooperative 7. occupancy under a rental agreement covering the premises used by the occupant primarily used for agricultural purposes 8. occupancy under a rental agreement (time share) 9. residence, whether temporary or not, at a charitable or emergency protective shelter, public or private.

a lease requires a minimum rent of $1200 plus a 1% increase for every point the consumer index rises during the course of a year. If the index rises 6 points during the first year of he lease, what will the rental level for the next year be?

1200 x 06 = $ $72 1200 +$72 = 1272

upon written notification from a tenant that a smoke detector is deficient, how long does the owner have to replace the detector?

15 days.

When was the civil rights act?

1866

When was the Fair Housing act?

1968

how long is the term that commission members serve?

4 years & until their successors are elected and appointed and qualify.

how many members of the SC real estate commission must be professionally engaged in the active practice of real estate?

7

Gross leases are most often used with? A. Apartments B. retail c. office d. industrial property

A. Apartments

National Franchising chains prefer which kinds of Leases? A. Net B. Net-net C. Triple net D. Gross lease E. Percentage Lease

A. Net Lease to control expenses and to ensure continuity between stores.

A Percentage lease is also called a A. Overage lease B. Straight Lease C. Net Lease

A. Overage lease

Malls typically use what kind of lease? (payment wise) A. Percentage B. Net C. Gross

A. Percentage

A valid lease should A. clearly identify the property b. be acknowledged c. be on a standard form d. be in compliance with the Uniform Residential Landlord tenant act

A. clearly identify the property

Index Lease

Adjustment of price often based on cost of living index and the wholesale index.

What does the civil rights act say?

All citizens shall have the same rights as white citizens to inherit, purchase, lease, sell, hold, and convey real and personal property.

The leasehold estate MOST commonly used by the property managers is an estate A. from period to period B. For years C. at will D. for percentage

B. For years definite beginning and end; Most leases start as estates (or tenancies) for years and then convert to period to period.

Triple nets are mostly widely used in ... A. Residential B. Industrial C. Office D. Retail

B. Industrial

Percentage Lease is commonly used for ... A. Industrial B. Retail C. Residential D. Office

B. Retail

Percentage leases are MOST often used with A. apartments B. Retail c. office D. industrial

B. Retail

When is the escalation clause most often used? A. Retail B. Industrial C. Office E. Residential

C. Office It is called an "expense stop."

Which lease requires the tenant to pay all the expenses related to the property? A. Gross B. Percentage C. Triple net D. Recapture

C. Triple Net

Leasehold estates that continually renew until either party gives notice to quit are called A. tenancy at will B. Tenancy at sufferance C. Estate from period to period D. Estate for years

C. estate from period to period

In what types of properties do tenants have the right to install trade or chattel fixtures?

Commercial or industrial tenant may be given this right.

Net leases are most commonly used with? A. Apartments B. Retail C. office D. industrial

D. industrial most - if not all expenses

Estate from Period to Period is terminated by sale of property or death T/F

F

how long is a vacation rental?

FEWER than 90 days

The more "nets" the less the tenants are paying T/F

False

Estate for Years Lease is terminated by death or sale of property T/F

False. Obligation goes to heirs

there needs to be three members on the south carolina real estate commission that are not professionally engaged in the practice of real estate T/F

False. TWO members

There are a number of exceptions to the civil rights act T/F

False. There are NO exceptions to the civil rights act

the 10th and final member of the sc real estate commission does not need to be in the active practice of real estate T/F

False. the 10th member needs to be in the active practice of real estate.

Most residential leases are what type of leases? (payment wise)

Gross Lease. (they pay a fixed amount while the landlord pays rest) - tenants usually pay utilities as well.

In What type(s) of leases is the step-up clause found?

Gross and Net Leases

Apartments are usually what type of lease? (payment wise)

Gross lease

Three types of lease payments

Gross lease percentage lease net lease

If you own THREE or fewer homes, it is legal to discriminate who you buy/rent to so long as you don't do it more than once every 2 years T/F

True

Many residential agreements are a combination of both estate for years and period to period T/F

True

Tenancy at Will is terminated by death T/F

True

The more "nets" the more the tenants are paying T/F

True

if a landlord does not sign and deliver a written rental agreement which has been signed and delivered to the landlord by the tenant, accept of rent without reservation by the landlord gives the rental agreement the same affect as if it had been signed and delivered by the landlord T/F

True

you cannot discriminate based on religion T/F

True and False. There is an exception. You can require someone to be of certain religion so long as you don't discriminate who can become part of that religion

constructive evictions is grounds for termination of a lease T/F

True. Most states recognize this as basis for termination of the lease, for an action to recover possession, or for a suits for damages. - for owner's protection, the lease should require the tenant to provide some time for the owner to remedy the situation before tenant claims constructive evictions.

Tenancy at Sufferance

a property renter is allowed to live in a property after the lease has expired, but before the owner demands them to leave. - the original lease conditions must be met. (also called "hold over" tenancy) - they have overstayed their welcome.

which of the following lease forms is MOST recommended? a. lease form drawn up by the attorney for the owner b. preprinted forms taken from the internet c. lease used by the manager in his or her previous company d. common lease used by local apartment association

a. lease form drawn up by attorney

Leases often provide for automatic cancellation if the a. property is condemned b. premises are partially damaged c. lessee becomes unemployed d. lessor becomes bankrupt

a. property is condemned

When describing the premises to be rented, an apartment lease should include the a. street address of the building b. legal description of the property c. dimensions of the space d. floor plan of the building

a. street address of the building

a lease may be assigned a. unless its term prohibit assignment b. only if it is a gross lease c. so that the owner may ensured that the tenant is stable and financially secure d. only with consent of the owner

a. unless its term prohibit assignment

Statute of Frauds

agreements can be made orally, but have to be in writing in order to be enforcable.(oral agreements can be forcable if less than one year)

valuable consideration

all lease contracts must contain some type of valid and value consideration

How many members are in the SC real estate commission a. 12 b. 10 c. 8 d. 9 e. 7

b. 10 members

According to the statute of frauds of MOST states, a. a lease must be in writing to be enforceable b. leases for more than one year must be in writing to be enforceable c. leases must comply with the Uniform Residential Landlord and Tenant Act d. leases must be on standard forms

b. Leases for more than one year must be in writing to be enforceable

what kind of lease provides for increases in the rental rates based on a selected index of economic conditions? a. percentage b. economic c. index d. cost of living

c. index

a lease should contain all of the following provisions except.. a. use of the premises b. building rules c. permission to sublet d. possession of the premises

c. permission to sublet

Escalation Clause

can be tied to outside factors other than economic indexes. Union pay scales, taxes, and overall operating costs for the premises are common controlling factors.

steering

channeling of members of protected classes to buildings or neighbors that are already occupied primarily by member of those classes and away from buildings and neighborhoods occupied primarily by members of other classes

What are the two types of jurisdiction courts in the landlord tenant act?

circuit courts and magistrate courts

Percentage Lease

commonly used for retail property. Usually provides for the payment of a fixed base rental fee plus a percentage of the tenant's gross income in excess of a predetermine minimum amount of sales.

what it is called when the tenant must vacate the premises because the landlord has failed to provide essential services?

constructive eviction

if a tenant declares bankruptcy, the PM should.. a. constructively evict the tenant b. forcibly evict the tenant c. complain to the bankruptcy court d. ask an attorney to check the latest laws and cases to determine the owner's rights

d. ask an attorney..

Advantage of percentage lease?

from tenants point of view: it is a long term lease with a fair minimum rental, obligating the tenant to pay additional amounts only when the business volume justifies an increase.

Net-Net Lease

generally requires tenants to pay all items included under the net lease terms plus the insurance premiums agreed on in the contact.

Step up Clauses are also called...

graduated or escalation leases

Good Consideration

lease or agreement that has value but can't be converted to money

Estate from Period to Period

lease that automatically renews unless either party gives notice of termination. Leases can run week to week, month to month etc.

wilful

means an attempt to intentionally avoid obligations under the rental agreement or the provisions of this chapter

Partial eviction

occurs when a tenant has not physically moved out but is unable to use part or all of the premises for the purposes intended in the lease due to some failure on part of the owner

one of the members needs to be elected how? (on the sc carolina real estate commission)

one elected from each of the seven congressional districts by a majority of house members and senators, representing the house and senate districts located within each of the congressional districts

who are the parties to the lease?

owner and tenant

what is another term for blockbusting?

panic selling

roomer

person that rents out just a room but shares living and kitchen, bathroom area

Tenancy at Will

property tenure that can be terminated at any time by either party

Redlining

refusing to make a loan or give insurance to people of certain ethnicities; the practice of denying services to residence of certain areas based on race

Recapture Clause

sets a minimum amount of rent that must be generated by the percentage of gross sales to ensure that the owner receives the anticipated rental rate.

What is another name for Gross Lease?

straight lease

blockbusting

the act of encouraging people to sell or rent by claiming that the entry of a protected class of people into the are a will have some negative impact on property values. convince white home owners to sell their houses as low prices in fear that black owners would soon move in. Agents would then sell houses to blacks at much higher prices

What is the Jones v. Alfred H. Mayer Company case?

the case that upheld the 1968 civil rights act that prohibits ALL racial discrimination

who appoints the two members representing the public who are not professionally engaged in the practice of real estate?

the governor (with advice and consent of the senate)

how is the 10th and final member of the sc real estate commission selected?

the nine elected and appointed members shall elect from the state at large one additional member who must be in the active practice of real estate.

condemnation

the process of taking private property for public use.

imminent domain

the right of the government to take private property for public use

constructive evictions

the tenant must actually abandon the premises due to the owner's negligence in supplying essential services. (ex). failure to supply water heater, to repair premises.

Net Lease

the tenant pays some or all of the expenses of the property in addition to the stated rent.

Strict Net Lease

the tenants pay utilities, real estate tax, and other special assessments levied against property in addition to rent.

Step Up Clause

they provided for specific increases at specific times. - often used in commercial spaces. (retail/office)

What is the purpose of antitrust laws?

to promote competition in an open marketplace.

Assignment of a Lease

transfers ALL of the tenant's remaining right in the property of a third party

Subletting of a Lease

transfers only SOME of the tenant's interest (transfer of the premises for part of remaining term, transfer of part of the premises, or combo of both)

passthrough

when all operating expenses of a building are charged on a pro rata basis to all tenants, the computation is called a passthrough.

on what day does a license expire?

June 30th

Estate for Years

Leasehold that has a definite beginning and end. Neither party is required to give notice at end of term. NOT terminated by death or sale; obligation goes to heirs

up to how much money & to who does it go to for a license renewal?

$10 can go to the SC real estate commission education and research fund - must be established as a separate and distinct account within the office of the State Treasurer.

What dollar amount does the magistrate courts have up to?

$7500. If its more, then it has to go to civil side of circuit court

Gross Lease

(also called a straight lease) - the tenant pays a fixed amount and the owner pays all other expenses.

Triple Net Lease

(net) + (net-net) + agreed on items of repair and maintenance

before being included, the "option to renew" clause must be carefully considered as it favors the ...

Tenant

What is protected under the fair housing act?

Race, color, religion, national origin, sex, family status (people with children, this is NOT based on marriage), and handicap (disability)

What are trade or chattel fixtures?

If tenant attaches fixture, they have the right to take it because it always remained personal property. "the tenants taking of possession" is different than "as of the beginning of the lease"