CHAPTER 17 - LEASES AND PROPERTY MANAGEMENT QUIZ

12. A clause in a lease which provides for increases in rents due to changes in costs or taxes is known as a/an: A. escalator clause. B. habendum clause. C. acceleration clause. D. prepayment penalty clause.

A

7. When a property is sold with an existing lease: A. the entire lease interest is transferred. B. the original lessor remains primarily liable on the lease. C. the original lessor has no liability under the lease. D. the assignee would pay the rent to the assignor.

A

A lease that allows for annual rent to increase on each anniversary is a A. graduated lease. B. gross lease. C. percentage lease. D. net lease.

A

11. The type of lease most commonly used in shopping centers is called a/an: A. gross lease. B. percentage lease. C. net lease D. open lease.

B

Under a lease, the leasehold estate is a right belonging to: A. landlord. B. tenant. C. remainderman. D. reversioner.

B

29. Which of the following may be used to guard the landlord against the hazards of inflation? A. index lease B. escalator lease C. reappraisal lease D. all of the above

D

6. A property manager may NOT be compensated by receiving: A. a percentage of the gross. B. a fee for leasing. C. a fee for supervising repairs. D. rebates from suppliers.

D

All of the following describe a percentage lease except one based upon: A. percentage of net income. B. percentage of gross income. C. minimum rental plus a percentage of gross income in excess of a stated minimum. D. certain percentage of the property's value.

D

23. Upon expiration of a lease, any remaining trade fixtures: A. may be removed by the tenant. B. belong to the landlord and tenant jointly. C. become the property of the landlord. D. may be removed by the tenant with compensation to the landlord for their depreciated value.

C

24. A landlord and tenant's mutual agreement to 3 cancel a lease is best described as: A. release and surrender. B. rescission and acceptance. C. surrender and acceptance. D. release and acceptance.

C

28. A lease provision which prohibits using certain premises for a drugstore is called: A. protective covenant. B. use covenant. C. restrictive covenant. D. condemnation covenant.

C

3. When a leased property is sold, the sale has the following effect on the tenants: A. Tenant must record lease in recorder's office. B. Tenant must obtain assignment from the purchaser. C. No effect. D. Tenant must move out after 30 days' notice.

C

32. An implied covenant in a lease which guarantees the tenant that his possession will not be disturbed because a defective title allows someone else to claim an interest in the property superior to that of the landlord is called: A. protective covenant. B. an implied warranty of habitability. C. a covenant of quiet enjoyment. D. restrictive covenant.

C

33. A first right of refusal clause in a lease gives the tenant: A. an option to buy the property in the future. B. an option to renew the lease. C. the right to buy the property at the same price offered by a bonafide purchaser. D. the right to buy the property at the same price refused by a bonafide purchaser.

C

A lease arrangement used by a business property owner to generate capital is called: A. a sandwich lease. B. a ground lease. C. a sale-leaseback. D. an occupancy agreement.

C

2. Jones leases a building. An earthquake destroys it. Usually: A. the lease is no longer enforceable. B. Jones needn't pay rent until the building is rebuilt. C. Jones must rebuild the building, but may deduct the cost from rent. D. Jones must continue to pay rent until the lease expires.

A

25. All of the following are less than freehold estate EXCEPT: A. conditional fee estate. B. estate at sufferance. C. estate at will. D. periodic estate.

A

31. A one-year lease for a residence requires: A. only a street address and apartment number for legal description. B. a physical description of the unit. C. a legal description by reference to a recorded plat. D. a complete legal description of the premises.

A

Tenant Kelly read his lease very carefully and could not find a restrictive covenant regarding the use of the property. Since zoning permitted, Kelly changes his business from a shoe store to a fish market. Landlord Hines objected. What is the probable outcome? A. Kelly may operate his fish market for the duration of the lease. B. Kelly may not change the business purpose of his lease without permission from Hines. C. Kelly may operate his fish market until he receives written notice from Hines of his intent to terminate the lease. D. While Hines may not evict Kelly, he may file suit for damages resulting from unauthorized use of the property.

A

1. A landowner leases his land to a lessee, who in turn leases the land to a sublessee. Who holds the sandwich lease? A. landowner B. lessee C. sublessee D. lessor

B

13. A lease a landlord may use to guard against losses due to inflation and vary rent payments in direct proportion to changes in the market value of the property is known as: A. net lease. B. reappraisal lease. C. graduated lease. D. percentage lease.

B

15. When a tenant is in possession of property and the tenancy is terminable by notice from either party, there exists: A. an estate for years. B. a periodic estate. C. a determinable estate. D. an estate at sufferance.

B

20. When real estate under a lease is sold, the lease: A. expires with the conveyance. B. binds the new owner. C. is subject to termination at the option of either party with proper notice. D. is valid but unenforceable.

B

21. A lease is all of the following EXCEPT: A. a conveyance. B. an option. C. a contract. D. an agreement.

B

26. A tenant who continues in possession of the premises after his rightful possession has ended is called a: A. tenancy at sufferance. B. holdover tenant. C. estate at will. D. tenant at will.

B

27. A lease in which a tenant pays rent at a fixed rate during the lease term with the landlord paying expenses associated with ownership is called: A. net lease. B. straight lease. C. ground lease. D. step-up lease.

B

34. With which of the following are rental payments guaranteed to increase during the term of the lease? A. escalator clause B. step-up lease C. index lease D. none of the above

B

35. An action to oust someone who is NOT legally in possession of real property is called: A. execution. B. ejectment. C. deposition. D. egress.

B

4. Tim has a five-year lease on a store building which called for the landlord to provide maintenance on the property. Although he notified the landlord on several occasions of a badly leaking roof, the landlord failed to make the necessary repairs. At his option, Tim could: A. stop paying rent until the roof was repaired. B. terminate the lease by claiming constructive eviction. C. get an injunction against the landlord. D. vacate the property without notifying the landlord.

B

9. Which of the following is true of a lease that contains an escalator clause? A. It extends to the original term of the lease. B. It assures the lessor of an increase in rent under certain conditions. C. It automatically renews itself. D. It assures the lessee that the rent will not increase.

B

10. Under a net lease, which of the following is the tenant NOT required to pay? A. taxes B. repairs C. utilities D. mortgage

D

14. A lease that allows rents to be adjusted up or down periodically based on CPI, prime lending rate, or yield on T-bills is known as: A. percentage lease. B. escalator lease. C. step-up lease. D. index lease.

D

22. A valid written lease does NOT require: A. legal capacity of both parties. B. an offer and acceptance. C. consideration. D. the signature of both parties.

D

8. A lease that provides for periodic increases in rent at regular intervals is known as: A. a percentage lease. B. a yearly lease. C. a long-term lease. D. a graduated lease.

D

Ben owns an apartment building free of an encumbrance. He has leased an apartment to Fred, who, in turn sublets to George. A. Fred has transferred his entire right, title, and interest in the leasehold. B. George should pay the rent to Ben. C. If George does not pay rent to Fred, then Fred is not liable to Ben for rent. D. Ben's agreement with Fred is not affected by the sublease in terms of Fred's liability.

D