real estate ch 8

abandonment

-If a tenant moves out while still owing rent, and leaves personal property behind -The landlord may dispose of the personal property, sell it, or keep it.

Sale and leaseback

A property owner sells property to an investor or lender and then leases it back. Therefore, the seller occupies the property after closing.

leasehold estate

Lease agreements create the leasehold estate. The lease is personal property, but the right to possession that the lease gives is real property. There are four leasehold estates and each gives possession without ownership.

Constructive eviction

Occurs when a landlord is aware of a property condition and allows deterio- ration to the point that the building is uninhabitable and the tenants are forced to leave.

non-disturbance clause

Some foreclosure sales and most eminent domain proceedings will terminate a lease. However, a non-disturbance clause in a mortgage protects a tenant from termination of the lease in the event of a foreclosure.

Expiration

When a lease agreement comes to the end of the lease period and terminates.

Mutual rescission

When a lease is terminated by agreement of the parties.

Termination

When the time period on a lease ends or is cut short.

Covenant of quiet enjoyment

a landlord is usually prohibited from entering leased property unless there is a need for maintenance, inspections or emergency response.

estate at will or tenancy at will

a lease that can be terminated by either party at will without notice.

periodic tenancy

a lease with a fixed period that is automatically renewed unless the tenant or landlord acts to terminate it. A month-to-month lease is this type. Notice to ter- minate is usually required, typically 30 days' notice.

estate for years

a lease with a specific starting and ending date. This lease survives death and/or the sale of the property. No notice is required to terminate.

Percentage Lease

lease in which all or part of the rent amount is based on the receipts of the tenant's business (Typical shopping center lease).

tenancy at sufferance

occurs when a lease expires and the tenant refuses to move out.The landlord is not receiving rent. This holdover tenant has no right to be there. If the holdover tenant pays rent and the landlord accepts that rent, a holdover tenancy is created.

The Lead-Based Paint Disclosure

required for rental property built before 1978.

Gross Lease

the landlord pays all the expenses of the property. The tenant pays only rent.

Forcible entry and detainer, or an action of forcible detainer

the legal term for eviction

Right of First Refusal

the tenant has the right to match or better any offer before the property will be sold to someone else.

Ground Lease

the tenant is usually making a long-term commitment, up to 99 years. This lease is more often for industrial or commercial land use. The tenant will build on the leased property.

Net Lease

the tenant pays rent plus some of the expenses of the property.

Assignment

the transfer of all rights and liabilities to a new tenant under an existing lease.

Subletting

the transfer of some or all of the rights and/or leased space under a lease to another, with liability remaining with the original tenant.

Oil and Gas Lease

this lease gives the tenant the right to extract oil and gas from a specific property. Upfront fees and royalties from production are usually associated with this type of lease.

management agreement

A property manager is a general agent with a broad scope of responsibilities and liabilities. A man- agement agreement is used to create this relationship and define the role and responsibilities of the agent and the owner. Once a licensee agrees to be a property manager the first step is to sign the management agreement. -He or she needs E&O (Errors and Omissions) Insurance.

Economic rent

The rent the property could currently command on the open market.

Contract rent

The rental income as stipulated by the parties in a contract.

Graduated Lease

a lease with scheduled rent increases often based on expected business growth.

Lease-purchase agreement

also called a lease with an option to buy - gives a tenant the right to purchase at a future date. The price is set when the agreement is negotiated. It is advantageous to the tenant-buyer.