Unit 7: Leases

Is a landlord liable for leasing property to a tenant who has been convicted of petty theft? A) Yes, if the landlord had knowledge of the conviction. B) No, a landlord is not liable for leasing to such tenant. C) Yes, the landlord is always liable. D) None of these.

B) No, a landlord is not liable for leasing to such tenant. The answer is no, a landlord is not liable for leasing to such tenant. A landlord or property manager is not liable for leasing property to a tenant who has been convicted of, arrested, or placed on deferred adjudication for a crime. (H.B. 1510, 2015)

For which of following rental units is it necessary to provide a lead-based paint disclosure to tenants in properties built before 1978? A) A loft B) A studio apartment C) A studio D) A one-bedroom unit

D) A one-bedroom unit The answer is a one-bedroom unit. A lead-based paint disclosure must be given to tenants in properties built before 1978. Houses exclusively for the elderly or handicapped (unless there are children living there); zero-bedroom units such as lofts, efficiencies, and studios; and properties that have been inspected and found free of lead-based paint are three of the few exemptions from the disclosure requirements.

Which of the following is NOT typically included in tenant eligibility criteria? A) Criminal history B) Previous rental history C) Current income D) Marital status

D) Marital status The answer is marital status. The printed or online notice must include the grounds for which an application may be denied, including the applicant's criminal history, previous rental history, current income, credit history, or failure to provide accurate or complete information on the application form.

When a tenant stays in a property beyond the expiration of the lease, what is that tenancy called? A) Criminal trespass B) Extended tenancy C) Tenancy at will D) Tenancy at sufferance

D) Tenancy at sufferance The answer is tenancy at sufferance. Most typically, tenancy at sufferance occurs when a landlord has his property foreclosed on but the tenant refuses to leave. It is not unusual for the tenant to be forced out by eviction.

Tenant Terri and landlord Lettie enter into a written contract for Terri to rent Lettie's commercial property only for use as a retail gift shop. Terri's gift shop does poorly and she decides to turn it into a small yoga studio without notifying Lettie. Can Lettie sue Terri for breach of contract? A) Yes, because the contract is subject to the statute of frauds. B) No, as long as Terri does not alter the property. C) No, because a gift shop is similar to a yoga studio. D) Yes, because Terri is violating the terms of use in the contract.

D) Yes, because Terri is violating the terms of use in the contract. The answer is yes, because Terri is violating the terms of use in the contract. A lessor may restrict a lessee's use of the premises through provisions included in the lease. A lease may provide that the leased premises are to be used only for a specific purpose and for no other. In the absence of such limitations, a lessee may use the premises for any lawful purpose.

In a leasehold estate, the landlord is called A) the lessor. B) the trustee. C) the lessee. D) the trustor.

A) the lessor. The answer is the lessor. A leasehold estate is a tenant's right to occupy real estate during the term of a lease.

Julio signed a lease in which he will pay a fixed amount of rent each month and the landlord will pay all of the building's expenses. Which type of lease has Julio signed? A) Percentage lease B) Gross lease C) Ground lease D) Net lease

B) Gross lease The answer is gross lease. Tenants generally pay for utilities, but other expenses are paid by the landlord. Most residential and commercial office leases are gross leases.

If the owner of a rental property constructed before 1978 begins renovation or repair work, under what circumstances must he provide a lead-based paint disclosure to tenants? A) Disclosure is only required if the property has previously been tested and found to contain lead-based paint. B) No additional disclosure is needed if the tenant already has signed a lease that includes a lead disclosure form. C) Disclosure is needed if the project disturbs more than 6 square feet of interior space o 20 square feet, or both, of exterior space. D) Disclosure must be made if the renovation or repair work is to be conducted by a workers not certified by the EPA.

C) Disclosure is needed if the project disturbs more than 6 square feet of interior space o 20 square feet, or both, of exterior space. The answer is disclosure is needed if the project disturbs more than 6 square feet of interior space o 20 square feet, or both, of exterior space. Also, any construction work must be completed by a crew that has been trained and certified under EPA rules.

What happens to a tenant application fee if the application is accepted? A) It is credited to the security deposit B) It is credited to the first month's rent. C) It is retained by the landlord to cover the cost of obtaining credit and criminal background checks. D) It is refunded to the applicant.

C) It is retained by the landlord to cover the cost of obtaining credit and criminal background checks. The answer is It is retained by the landlord to cover the cost of obtaining credit and criminal background checks. An application fee is a sum of money that may be charged by a landlord to offset the actual costs of screening an applicant for acceptance as a tenant. It covers such expenses as the cost of obtaining credit and criminal background checks. The property owner does not have to refund an application fee if the applicant is rejected.

Lead-based paint disclosures on properties built before 1978 A) must be retained by the owner for at least one year after the lease begins. B) are not required on leased properties. C) must be given to all renters. D) require renter notification if repair work disturbs more than 6 square feet of interior surface area.

D) require renter notification if repair work disturbs more than 6 square feet of interior surface area. The answer is require renter notification if repair work disturbs more than 6 square feet of interior surface area. Lead-based paint disclosures must be given to tenants in properties built before 1978, with some exceptions. A copy of the disclosure signed by the resident(s), owner, and any leasing agent must be retained by the owner for at least three years after the lease begins. If repair work disturbs more than 6 square feet of surface area for interior work or 20 square feet for exterior work, rental residents must be notified and given a copy of the EPA pamphlet Renovate Right.

Which of the following is TRUE? A) A multidwelling rental housing owner must disclose to all rental applicants of an apartment community that a convicted sex offender is living in the apartment community. B) The owners of single-family rental houses have a duty to disclose to rental applicants any information about high-risk sex offenders living near the rental dwelling that they know about. C) A multidwelling rental housing owner need not disclose to rental applicants of an apartment community that a convicted sex offender is living in the apartment community. D) The owner of a single-family rental unit has a duty to disclose to rental applicants any information about high-risk sex offenders living near the rental unit.

A) A multidwelling rental housing owner must disclose to all rental applicants of an apartment community that a convicted sex offender is living in the apartment community. The answer is a multidwelling rental housing owner must disclose to all rental applicants of an apartment community that a convicted sex offender is living in the apartment community. This is according to legal counsel for the Texas Apartment Association. However, the owners of single-family rental houses do not have a duty to disclose to buyers and rental applicants any information about high-risk sex offenders living near the rental dwelling.

What is an example of a tenancy at will? A) At the end of a lease period, a landlord informs a tenant that he is selling the property in a few months and gives the tenant the option to move or stay. B) None of these. C) A lease agreement continues for a definite period. D) A tenant in an estate for two years fails to surrender possession of the property at the expiration of the lease.

A) At the end of a lease period, a landlord informs a tenant that he is selling the property in a few months and gives the tenant the option to move or stay. The answer is at the end of a lease period, a landlord informs a tenant that he is selling the property in four months and gives the tenant the option to move or stay. A tenancy at will is a leasehold estate that exists for as long as both lessor and lessee desire it to last. Therefore, it is a tenancy of indefinite duration.

Tenant Terrell and landlord Lorna enter into a commercial agreement wherein Terrell will lease a small office space in a strip mall from Lorna for a period of five years. The contract does not have a right of first refusal. Terrell does extremely well in the first year and wants to expand into an adjoining space when it becomes free in two months. Lorna isn't particularly happy with Terrell as a tenant and knows that she can do just as well leasing the space out to someone else. What are Terrell's options? A) Because there is no right of first refusal, all Terrell can do is ask Lorna whether she will lease the adjoining space to him. B) Terrell has an automatic right of first refusal; it does not need to be specified in the contract. C) Terrell's right of first refusal is implied from the circumstances. D) Lorna is legally required to lease the space to Terrell if he offers to pay more than the going rent.

A) Because there is no right of first refusal, all Terrell can do is ask Lorna whether she will lease the adjoining space to him. The answer is since there is no right of first refusal, all Terrell can do is ask Lorna whether she will lease the adjoining space to him. The right of first refusal allows a tenant to match an offer from another party on vacant space in a building. Leases with tenants who foresee a need to expand often contain this clause.

Jasmine owns a home that she has rented to Sue. Sue stopped making her rent payments, necessitating Jasmine's evicting her. Which is NOT a part of the process she is expected to follow to regain possession of the property? A) Jasmine must give a 24-hour address or phone number to Sue so Sue can get a key to get into the property. B) If the court issues a judgment of possession in favor of Jasmine, Sue will have five days to file an appeal. C) The forcible detainer suit will be heard in court not less than 20 and not more than 21 days after Jasmine's filing the eviction documents. D) Jasmine will post an eviction notice on Sue's front door, stating the deadlines for payment of rent and that legal assistance is available.

A) Jasmine must give a 24-hour address or phone number to Sue so Sue can get a key to get into the property. The answer is Jasmine must give a 24-hour address or phone number to Sue so Sue can get a key to get into the property. Although a landlord is required to give a tenant at least three days' notice that, if rent remains unpaid, the landlord will file a forcible detainer suit, there is no requirement for the landlord to be available for 24 hours after the notice is posted. The 24-hour address or phone number requirement applies only to the landlord's lockout remedy. After the court issues a judgment of possession in favor of a landlord and the tenant has had five days to appeal the decision, the court may issue a writ of possession to the landlord. Within 48 hours after receiving the writ of possession, the landlord must deliver written notice that the writ will be enforced on or after a specific date and time. Evicted tenants must peaceably remove themselves and all belongings, or the landlord can have the judgment enforced by a deputy sheriff, who will oversee their forcible removal.

Jack purchased a new home and decided to keep his former single-family residence as a rental property. Which of the following is NOT a requirement of the Fair Housing Act disability provisions that Jack must follow? A) Leasing to an individual with a disability, even though the occupancy would result in substantial physical damage to Jack's property or others in the neighborhood, would be a reasonable accommodation required under the law. B) Requiring a disabled tenant to provide a description of proposed modifications, to assure that the work will be done in a workmanlike manner, and to pay for alterations to the property, is acceptable under the reasonable modification provisions required under the law. C) Installing a ramp into a rental house might be a reasonable modification required under the law. D) Permitting a Seeing Eye® dog, even though Jack has a no-pets policy, would be a reasonable accommodation required under the law.

A) Leasing to an individual with a disability, even though the occupancy would result in substantial physical damage to Jack's property or others in the neighborhood, would be a reasonable accommodation required under the law. The answer is leasing to an individual with a disability, even though the occupancy would result in substantial physical damage to Jack's property or others in the neighborhood, would be a reasonable accommodation required under the law. All persons must have access to housing of their choice without differentiation in the terms and conditions because of their race, color, religion, national origin, sex, handicap, or familial status. The Fair Housing Act requires reasonable accommodation and reasonable modification for a person with a disability. However, the Fair Housing Act does not protect an individual with a disability whose tenancy would constitute a direct threat to the health or safety of other individuals or result in substantial physical damage to the property of others, unless the threat can be eliminated or significantly reduced by reasonable accommodation.

Which of the following may NOT create a lease contract? A) Real estate sales agent B) Attorney licensed to practice in Texas C) The Texas Association of REALTORS® D) The property owner

A) Real estate sales agent The answer is real estate sales agent. Lease agreements are considered legal contracts and sales agents are specifically barred from practicing law without a license. Sales agents may help their clients fill in contracts promulgated by TREC or created by an attorney in situations where there is no TREC-promulgated contract. Property owners are permitted to create their own forms for their own properties, but documents should be reviewed by an attorney.

A variable lease may be an index lease or A) a graduated lease. B) a ground lease. C) a fixed lease. D) a percentage lease.

A) a graduated lease. The answer is a graduated lease. A graduated lease allows for rent changes at set future dates. For example, a lease agreement might provide for a rent of $800 a month for the first year, $1,000 a month for the second year, and $1,200 a month for the third year. Similarly, rent for a resort property might vary according to the season. An index lease allows rent to be increased or decreased periodically based on changes in the government cost-of-living index or some other index.

When a landowner leases land to a tenant who agrees to erect a building on it, the lease usually is called A) a ground lease. B) a net lease. C) a percentage lease. D) a gross lease.

A) a ground lease. The answer is a ground lease. A ground lease may be attractive to a business involved in a development project, because it reduces the amount of money the tenant must finance. It must be for a long-enough term to make the transaction desirable to the tenant making the investment in the building; they often run for terms of 50 years or longer. These leases are generally net leases that require the lessee to pay rent, as well as real estate taxes, insurance, upkeep, and repairs.

A landlord and a tenant agree to rent an apartment by the month without specifying the number of months the lease will run. This is A) a periodic estate. B) a tenancy at sufferance. C) an estate for years. D) a tenancy at will.

A) a periodic estate. The answer is a periodic estate. A periodic estate runs from period to period (week to week, month to month, year to year, etc.). The lease is automatically renewed when the rent is paid. A 30-day notice is generally required to end the estate. An estate for years always has a specific starting and ending time and does not automatically renew at the end of the lease period. No notice is required to terminate the lease at the end of the lease period, because a specific expiration date already is provided.

If an applicant in a wheelchair wants to see an apartment on an upper floor in a building that has no elevator, the applicant A) must be shown the apartment. B) have none of these apply. C) does not have to be shown the apartment. D) should be shown the apartment.

A) must be shown the apartment. The answer is must be shown the apartment. A disabled rental applicant must be shown the same dwellings as an able-bodied applicant. The prohibition against discrimination toward people with disabilities applies to all rental properties. Disabled tenants must be permitted to make reasonable modifications to the structure to permit full enjoyment of the housing and related facilities. Reasonable modifications are usually made at the tenant's expense, and the owner may require that the premises be restored to their original condition at the end of the lease term. Additionally, landlords are required to make reasonable accommodations by changing or adjusting rules, policies, practices, or services for disabled tenants.

A tenant usually is allowed to make improvements to the property A) only with the landlord's permission. B) if the lease includes a maintenance clause. C) unless the landlord states otherwise in the lease. D) in any gross lease.

A) only with the landlord's permission. The answer is only with the landlord's permission. Neither tenant nor landlord is obligated to make improvements. Any improvements made become fixtures and are the property of the landlord.

Tenant Tobias decides to rent a house from landlord Larry for two years. They do not sign a lease and only rely on a "handshake." Tobias finds a much nicer home for a lot less money and decides to go with the nicer home. Can Larry sue Tobias for breach of contract? A) Yes, because the lease was to be for two years. B) No, because the lease was to be for two years. C) Yes, because an oral lease is legal. D) No, because there was no consideration.

B) No, because the lease was to be for two years. The answer is No, because the lease was to be for two years. The Texas statute of frauds requires that leases for longer than one year be in writing because a lease is considered a conveyance of an interest in real estate.

Which of the following terminates upon either party's giving proper notice or by the death of either party? A) Life estate B) Tenancy at will C) Estate for years D) Periodic estate

B) Tenancy at will The answer is tenancy at will. A tenancy at will is a leasehold estate that runs for an indefinite period until terminated by either party. The tenant possesses the property with the consent of the landlord and has a duty to pay rent at regular intervals.

May a tenant change or improve a property without the landlord's permission? A) Tenants may make cosmetic improvements (painting, light fixtures) but may not structurally change the property (remove walls, change entryways, etc.) B) Tenants may not improve property without first discussing the proposed improvements with the landlord. C) Tenants may make improvements valued under $10,000 without notifying the landlord. D) Tenants may improve properties only because of acts of nature, such as roof leaks caused by storms or damage from flooding.

B) Tenants may not improve property without first discussing the proposed improvements with the landlord. The answer is tenants may not improve property without first discussing the proposed improvements with the landlord. Questions most typically arise in rental agreements for retail space. Landlords, however, are not obligated to make any improvements beyond whatever is stated in the lease agreement.

A tenant in a wheelchair wants to install a ramp to get through the front door of a single-family unit. Which of the following statements is true regarding this matter, assuming that the landlord considers this to be a reasonable modification? A) The tenant is free to install the ramp and bill the landlord for the cost. B) The tenant may install the ramp and take the cost out of her rent C) The tenant may install the ramp and pay all costs of installation. D) The landlord must install and pay for all costs of installing the ramp.

C) The tenant may install the ramp and pay all costs of installation. The answer is the tenant may install the ramp and pay all costs of installation. Allowing a person with a disability to install a ramp into a rental house might be a reasonable modification. Reasonable modifications are usually made at the tenant's expense. If the modifications would interfere with a future tenant's use, the owner may require that the premises be restored to their original condition at the end of the lease term. LO 19.1

If the landlord has an online application process, where must the landlord show the rental qualification criteria? A) The criteria must be at the bottom of the first page. B) The criteria must be adjacent to the application signature line. C) The website must clearly and conspicuously show the rental qualification criteria. D) The criteria must be at the top of the website.

C) The website must clearly and conspicuously show the rental qualification criteria. The answer is the website must clearly and conspicuously show the rental qualification criteria. The printed or online notice must include the grounds for which an application may be denied.

Under Texas law, what is the maximum number of adults that a landlord may allow to occupy a dwelling in most instances? A) There is no limit B) Two times the number of bedrooms C) Three times the number of bedrooms D) Two adults maximum

C) Three times the number of bedrooms The answer is three times the number of bedrooms. The Texas Property Code, Section 92.010, sets the maximum number of adults (18 years of age or older) that a landlord may allow to occupy a dwelling at three times the number of bedrooms in the dwelling, in most instances. Under the Texas law, bedroom means an area of a dwelling intended as sleeping quarters.

Landlord Leslie and tenants Toni and Terri enter into a lease wherein Toni and Terri will rent Leslie's house for an indefinite period. Toni and Terri are married, and Toni is 16 years old. Is the contract valid? A) No, because the lease has no termination date. B) No, because Toni is too young. C) Yes, because Toni and Terri are married. D) Yes because Toni is 16.

C) Yes, because Toni and Terri are married. The answer is yes, because Toni and Terri are married. The parties must have the legal capacity to contract. That means that they must be 18 or older, or married. In this case, because they are married, the contract is valid.

The requirements of a valid lease include all EXCEPT A) offer and acceptance. B) valuable consideration. C) capacity to contract. D) recordation in the county clerk's office.

D) recordation in the county clerk's office. The answer is recordation in the county clerk's office. The requirements for a valid lease also include legal objectives and a legal description. A lease may be recorded if signed and acknowledged before a notary public or other officer. Recording will take place in the county in which the property is located. Unless a lease is for three years or longer, it usually is not recorded. However, if a lessee intends to mortgage a leasehold interest, recordation is required.