Unit 17: Leases

Lease

A contract between an owner of real estate (the lessor) and a tenant (the lessee) --- transfer the lessor's rights to exclusive possession and use of the property to the tenant for a specified period.

Implied Warranty of Habitability

A landlord must deliver and maintain throughout the duration of the lease any residential leasehold free from defects that would render the use of the dwelling "unsafe or unsanitary" and unfit for human occupancy.

Forcible entry and Detainer

A landlord seeking actual eviction of a tenant must file an action.

Leasehold Estate

A tenant's right to possess real estate for the term of the lease

Right of First Refusal

Allowing the tenant the opportunity to buy the property before the owner accepts an offer from another party.

Cash Rent

An agreed-on rental amount in cash in advance.

Rental-finding Service

Any business that finds, attempts to find, or offers to find for any person for consideration a unit of rental real estate or a lessee for a unit of rental real estate not owned or leased by the business.

Reversionary Right

Any interest, vested or contingent, the enjoyment of which is postponed.

Estate at Sufferance

Arises when a tenant who lawfully possessed real property continues in possession of the premises without the landlord's consent after the rights expire (a holdover).

Month-to-month Tenancy

Created when a tenant takes possession with no definite termination date and pays monthly rent.

Estate from Period to Period

Created when the landlord and the tenant enter into an agreement for an indefinite time --- does not contain a specific expiration date.

Security Deposit

Defaults on payment of rent or damages the premises, the lessor may keep all or part of the deposit to compensate for the loss.

Estate at Will

Gives the tenant the right to possess property with the landlord's consent for an unspecified or uncertain term.

Estate for Years

Leasehold estate that continues for a specific beginning and ending dates.

Nondisturbance Clause

Mortgage clause stating that in the event that the mortgagee forecloses on the mortgagor-lessor's building, the mortgagee agrees not to terminate the tenancies of lessees who pay their rent.

Holdover Tenancy

No new lease agreement has been made.

Assignment

Occurs when a tenant transfers all of his leasehold interests to another person.

Sharecropping

Percentage of the profits or losses from the sale of the crop when it is sold.

Percentage Lease

The rent is based on a minimum fixed rental fee plus a percentage of the gross income generated by the tenant doing business on the leased property.

Constructive Eviction

The tenant must prove that the premises have become unusable because of the conscious neglect of the landlord.

gross lease

The tenant pays a fixed rent and the landlord pays all taxes, assessments, insurance, maintenance and utilities connected with the property.

Net Lease

The tenant pays all or some of the operating expenses in addition to the rent.

Ground Lease

When a landowner leases unimproved land to a tenant who agrees to erect a building on the land.

Actual Eviction

When a tenant breaches a lease or improperly retains leased premises, the landlord may regain possession through a legal process.

Sublease

When a tenant transfers less than all the leasehold interests by leasing them to a new tenant.

Lease Purchase

When a tenant wants to purchase the property but is unable to do so.