Real estate chapter 10

Landlord's rights and responsibilities:

1. Implied right of habitability: guaranteeing that the property meets the minimum health and housing codes. 2. Ensuring that the property's common areas are safe. 3. Respect the tenant's use and quiet enjoyment of the property,as long as the tenant is following the terms of the lease. 4. Live by federal and state fair housing laws. 5. Allowed to terminate a month-to-month rental agreement (WITHOUT a reason or violation by the tenant) by serving a previous notice. 6. Right to inspect a property periodically, but must follow specific guidelines when doing so.

A California lease has the following MINIMUM requirements:

1. It must state the length or duration of the lease.(Under the law, agricultural lands have a maximum lease time of 51 years; while urban property leases and mineral, oil, or gas leases have maximum durations of 99 years.) 2. It must include the amount of rent and the date on which it is to be paid. 3. It must contain the names of the parties (lessee and lessor). 4. It must include a sufficient description of the property. (This could be simply the street address or, in some cases, it could mean the street address AND the legal description.) 5. It must give evidence of both the landlord's and the tenant's intent to create a landlord-tenant relationship.

Tenants' rights and responsibilities:

1. NOT damage the property. 2. Give at least 30 days' notice prior to vacating the property. 3. Tenants must not interfere with the rights of other tenants. 4. Keep the premises clean and sanitary.

In addition to these minimum requirements, there are other contractual issues that should be addressed before a lease is drawn up between the parties:

6. It must have ANY RENEWAL OR EXTENSION provisions in at least 8-POINT BOLDFACE TYPE to be valid. (A renewal or extension provision is a clause that would allow for the lease to automatically renew or be extended if the lessee remained in possession of the property once the lease had expired.) 7. The security deposit. 8. Any assignment and subleasing options. 9. Liabilities for injuries and repairs. 10. The conditions and provisions of a lease. 11. The termination of the lease.

What sort of notice is required by the landlord if tenant has lived for over a year at his property

60 day notice

escalator clause

A clause in a lease in which the parties agree to an adjustment of rent based on set increases in taxes, insurance, maintenance, and other operating costs

appraisal lease

A lease which states a date in the future for a new appraisal. (If the appraisal is higher than last appraisal, the rent will go up accordingly.)

non disturbance clause

A mortgage clause which requires that tenants cannot be disturbed if the property is foreclosed upon

Four main leasehold estate types

An Estate for Years An estate from period to period Estate at will estate at sufferance

economic rent

Currently referred to as MARKET RENT, it is the rental income that real estate can command in an open, competitive market at any given time, in contrast with contract rent, or the income actually received under a lease agreement

California Civil Code Section 1942

If landlord hasn't made repairs brought to his attention, tenant may: • Spend up to one month's rent in repairs (This is permitted only twice in any twelve-month period.), known as rental offset; OR • Abandon the premises, in which case the tenant is relieved from the requirement of paying additional rent and the performance of other conditions of the lease. The current law in California FORBIDS any retaliatory action, such as raising the rent or serving an eviction notice, for a period of 180 DAYS after the tenant's use of this rental offset.

index lease

Lease is based on some type of index, such as Cost of Living, etc. Usually adjusts upward.

ground lease

Long-term lease, usually 99 years; tenant may build on a property with a ground lease, but property is still the landlord's.

Upon termination, is a landlord required for giving a tenant reason for it

No, nor does tenant have to be in violation of agreement

do subletting and assignment transfer ownership?

No, only transfer possession

Actual eviction

The landlord's remedy to regain possession of property.

triple net lease

The tenant also pays for some agreed-upon items of repair and maintenance.

net lease

The tenant has agreed to pay ownership expenses, usually utilities, property taxes, and special assessments.

constructive eviction

This is the tenant's remedy if property is not habitable. (The tenant must vacate the property, send notice to the landlord telling him/her of the problem, and put the rent money in escrow until the issue can be resolved.)

Are security deposits refundable?

cannot be labeled as such

lease extension

continuation in possession under the original lease

graduated lease

cost goes up at regular intervals

lease renewal

creates a new and distinct tenancy

How is a lease normally terminated

expiration of the lease's term OR by mutual consent.

rent control

govt regulation of amount of rent landlord can charge a tenant

Statement of property condition

inspection report that states the condition of the property upon the tenant's moving in and moving out of the property. • If there is NO damage or cleaning required to the vacated property, then the landlord has a maximum of 21 days from the date of the tenant vacating the property to refund the security (and "cleaning") deposits.

lessor

landlord (has freehold interest)

Tenancy at will

landlord or tenant terminate rental agreement with 30-day written notice unless agreed to a longer notice period

sandwich lease

leasehold interest in a property that lies between the ownership interest and the tenancy interest

eviction

legal procedure of removing a tenant from a property because there is a breach of the lease or rental agreement

Can a landlord remove a tenant on his own?

no it is illegal

Does a lessor have to sign for a lease to be valid

no, occupation of property is considered enough proof

lease

oral or written agreement that creates and governs, by express or implied terms, a landlord-tenant relationship

Under CA law, if a lease is written it must be

signed by lessor.

lessee

tenant (has leasehold interest)

Rental offset

tenant has the right to spend up to one month's rent in repairs.

net net lease

tenant pays for insurance as well

contract rent

term given to actual amount of rent to be paid

if the landlord retains any portion of the deposit in bad faith

the landlord is liable for actual damages, a statutory penalty not exceeding $600.00, AND interest thereon at the rate of 2% per month from the due date until paid. The landlord might also be held liable for punitive damages.

subletting/subleasing

the partial transfer of a tenant's right in a rental property to a third party

assignment

transfer of a tenant's remaining rental rights (not responsibilities) in a property to a third party

dual nature of lease

• A conveyance by the landlord to the tenant of an estate in real property covering the premises leased; AND • A contract between the landlord and tenant, which governs both the landlord's delivery and maintenance of the premises and the tenant's possession of, use of, and payments for the premises.

estate from period to period

• Also known as periodic tenancy, or a month-to-month lease. • Proper notice is required to terminate (30 days - 60 days or whatever is agreed to in the lease). • No definite ending date. (This type of lease renews itself for whatever period of time that was called for in the original lease or whatever is agreed upon in the actual lease.) • Most apartment leases are estates from period to period if the tenant is required to give notice to terminate.

• The maximum allowed security deposits for residential properties (in addition to first month's rent) are

• For an unfurnished rental, 2 months' rent; for a furnished rental, 3 months' rent.

California's Statute of Frauds requires a lease to be in writing if it either:

• Has a term longer than one year; or • Has a term less than one year, which expires more than one year after the agreement is reached. (This could occur if the parties made the lease agreement in advance of the actual commencement of the lease; for example, in June for an 11-month lease that wasn't to begin until September, thereby extending the contractual relationship for longer than a year, even if the months between June and September were only a pre-tenancy period.)

estate for years

• It has a definite beginning and ending date. • It is not necessary to give notice to the landlord to terminate an estate for years. • Renewal is NOT automatic, when this type of lease is over, it's over. • Many commercial leases and some apartment leases are estates for years. • Remember: This type of lease can be for any amount of time. • A one-day lease to rent a hotel room has a definite beginning and ending so it would be considered an estate for years.

estate at will

• Landlord lets you stay without a lease. • Notice can be given by either party without warning. • Death of either party immediately terminates an estate at will.

Regarding California leases and rent:

• Periodic tenancy: the lease agreement must state the periods involved. • Unless a lease agreement states otherwise,rent becomes due only at the end of the term. • Estate for years: if there is no due date given in the lease agreement, then the rent is due on the last business day of the calendar year. • No government agency may adopt any rent control restrictions on non-residential property.

estate at sufferance

• When a tenant stays past the term of his lease, he/she is known as a holdover tenant because he/she is unlawfully in possession of the property. • The landlord must evict the tenant through the court. (He cannot lock the tenant out, turn off utilities, or forcibly remove the tenant.)

When can a landlord enter a property

• in case of emergency; • to make necessary or agreed repairs, decorations, alterations, or improvements; • to supply necessary or agreed services; • to show the dwelling to prospective or actual purchasers, mortgagees, tenants, workmen, or contractors; • where the tenant has abandoned or surrendered the premises; or • under a court order.