ch 17 leases
termination of tenancy from week to we
7 days written ntoice
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. Nothing may be present on the premises that could seriously endanger the life, health, or safety of the tenant.
nondisturbance clause
A nondisturbance clause is a 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.
leasehold estate
A tenant's right to possess real estate for the term of the lease
agriculture lease
Agricultural landowners often lease their land to tenant farmers, who provide the labor to produce and bring in a crop. A landowner can be paid by a tenant in one of two ways: as an agreed-on rental amount in cash in advance (cash rent), or as a percentage of the profits or losses from the sale of the crop when it is sold (sharecropping).
holdover tenancy
An estate from period to period also might be created when a tenant with an estate for years remains in possession (holds over) after the lease term expires. If no new lease agreement has been made, a holdover tenancy is created. The landlord's acceptance of rent usually is considered conclusive proof of acceptance of the periodic (holdover) tenancy. Some leases stipulate that in the absence of a renewal agreement, a tenant who holds over does so as a month-to-month tenant. IN ILLINOIS
to terminte a Tenancy from year to year.
At least 60 days' written notice is required at any time within the four-month period before the last 60 days of the lease period.
A tenant's tenancy for years will expire in two weeks. The tenant plans to move to a larger apartment across town when the current tenancy expires. What must the tenant do to terminate this agreement? A) The agreement will terminate only after the tenant signs a lease for the new apartment. B) The tenant must give the landlord two weeks' prior notice. C) The tenant must give the landlord one week's prior notice. D) The tenant needs to do nothing; th
Explanation The answer is the tenant needs to do nothing; the agreement will terminate automatically. No notice is required to terminate the tenancy for years (estate for years) because the lease agreement states a specific expiration date. When the expiration date comes, the lease expires, and the tenant's rights are extinguished.
An estate for years gives the tenant the right to possess property with the landlord's consent for an unspecified term. True False Explanation The statement is false. This statement describes an estate at will. An estate for years is a leasehold that continues for a definite period of time. An estate for years always has specific beginning and ending dates.
Explanation The statement is false. This statement describes an estate at will. An estate for years is a leasehold that continues for a definite period of time. An estate for years always has specific beginning and ending dates.
constructive eviction
If a landlord breaches any clause of a lease agreement, the tenant has the right to sue and recover damages against the landlord. If the leased premises become unusable for the purpose stated in the lease, the tenant may have the right to abandon the premises. This action, called constructive eviction, terminates the lease agreement. The tenant must prove that the premises have become unusable because of the conscious neglect of the landlord. To claim constructive eviction, the tenant must leave the premises while the conditions that made the premises uninhabitable exist.
gross lease
In a gross lease, the tenant pays a fixed rent and the landlord pays all taxes, assessments, insurance, maintenance and utilities connected with the property (usually called property charges or operating expenses). This is the typical rent structure involved in apartment rentals.
percentage lease
In a 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. This type of lease is usually used for retail businesses and restaurants. The percentage charged is negotiable and varies depending on the nature of the business, the location of the property, and general economic conditions.
sale and leaseback arrangment
In a sale-and-leaseback arrangement, the owners of property sell the property and then lease it back again for an agreed period. A sale-and-leaseback is often used when extra capital is needed on a construction project. The original owners pull out their equity to use on other projects and reduce their taxable income when they pay rent to the new owner. The new owner now has a reliable source of rental income for an extended time.
triple net lease
In a triple-net lease (also called a net-net-net lease), the tenant pays all operating and other expenses in addition to rent. These expenses include taxes, assessments, insurance, maintenance, utilities, and other charges related to the premises.
terminate a Tenancy from month to month.
In any periodic estate having a term of less than year to year but greater than week to week, 30 days' written notice is required.
lease assignment
Lease assignment occurs when a tenant transfers all of his leasehold interests to another person. The new tenant is legally obligated for all the promises the original tenant made in the lease.
subleased
On the other hand, when a tenant transfers less than all the leasehold interests by leasing them to a new tenant, the original tenant has subleased (or sublet) the property. T
A commercial lease calls for a minimum rent of $1,200 per month plus 4% of the annual gross business exceeding $150,000. If the total rent paid at the end of one year was $19,200, how much business did the tenant do during the year? A) $159,800 B) $279,200 C) $270,000 D) $250,200
The answer is $270,000. $1,200 × 12 = $14,400; $19,200 - 14,400 = 4,800 ÷ 0.04 = $120,000; $120,000 + 150,000 = $270,000.
How many days' advance notice is required to terminate a month-to-month tenancy in Illinois? A) 15 B) 60 C) 5 D) 30
The answer is 30. In any periodic estate having a term of less than year to year but greater than week to week, 30 days' written notice is required.
Before entering into a service relationship with a prospective tenant, a rental-finding service must provide the prospective tenant with a written contract that discloses what information? A) The total amount to be paid over the lease term B) A statement that the contract will be invalid if information about a rental unit is provided when the unit has been unavailable for more than five days C) A copy of the brokerage agreement between the owner and the rental-finding service D) A statement that information about rental units may be up to two days old
The answer is a statement that information about rental units may be up to two days old. Rental-finding services are required to enter into written contracts with the parties for whom their services are to be performed. The contract must clearly disclose a statement that the contract will be void, and all fees paid in advance will be refunded, if the information provided regarding possible rental units available is not current or accurate (that is, if a rental unit is listed that has not been available for more than two days).
A tenant still has five months remaining on a one-year apartment lease. When the tenant moves to another city, she transfers possession of the apartment to a friend for the entire remaining term of the lease. The friend pays rent directly to the tenant. In this situation, the tenant has become A) a lessor. B) a sublessee. C) a sublessor. D) an assignor.
The answer is a sublessor. When a tenant transfers less than all the leasehold interests by leasing them to a new tenant, the original tenant has subleased (or sublet) the property. The original tenant (sublessor) remains responsible for rent being paid by the new tenant and for any damage done to the rental during the lease term
Under the negotiated terms of a particular residential lease, the landlord is required to maintain the water heater. If a tenant is unable to get hot water because of a faulty water heater that the landlord has failed to repair after repeated notification, which remedy would be available to the tenant? A) Abandoning the premises under constructive eviction B) Suing the landlord for damages C) Assigning the lease agreement D) Being refunded back rent by the landlord
The answer is abandoning the premises under constructive eviction. If the leased premises become unusable for the purpose stated in the lease, the tenant may have the right to abandon the premises. This action, called constructive eviction, terminates the lease agreement.
A tenant's lease has expired. The tenant has neither vacated the premises nor negotiated a renewal lease, and the landlord has declared that she does not want the tenant to remain in the building. This form of possession is called A) an estate for years. B) an estate at sufferance. C) an estate at will. D) a periodic estate.
The answer is an estate at sufferance. An 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.
What is rent? A) All monies paid by the lessor to the lessee B) Total balance owed under the terms of a lease C) Contractual consideration to a third party D) Consideration for the use of real property`
The answer is consideration for the use of real property. Rent is the normal consideration given for the right to occupy the leased premises.
A person has a one-year leasehold interest in a house. The interest automatically renews itself at the end of each year. The person's interest is called a tenancy A) from period to period. B) at will. C) at sufferance. D) for years.
The answer is from period to period. Such a tenancy is created for a specific payment period-for example, month to month, week to week, or year to year-but continues indefinitely until proper notice of termination is given.
A tenant signs a lease that includes a schedule of rent increases on specific dates over the course of the lease term. What type of lease has the tenant signed? A) Percentage B) Net C) Graduated D) Index
The answer is graduated. Several types of leases allow for increases in the rental charges during the lease period. One of these is the graduated lease, which provides for specified rent increases at set future dates.
When a tenant holds possession of a landlord's property without a current lease agreement and without the landlord's approval, the A) tenant has no obligation to pay rent. B) tenant is maintaining a gross lease. C) landlord can file suit for possession. D) landlord may be subject to a constructive eviction.
The answer is landlord can file suit for possession. When a tenant breaches a lease or improperly retains leased premises, the landlord may regain possession through a legal process called actual eviction.
A tenant has a one-year lease on an apartment. If the tenant fails to pay his rent when it is due, the landlord may A) serve notice on the tenant to pay the rent within five days and proceed with a suit for possession regardless of whether or not the tenant pays the past-due rent. B) hire a moving company to remove the tenant's furniture and personal property from the premises. C) terminate the tenant's lease without notice when the rent is more than 10 days past due. D) serve notice on the tenant to pay the delinquent rent within five days.
The answer is serve notice on the tenant to pay the delinquent rent within five days. If a tenant defaults on the payment of rent, the landlord may elect to serve the tenant with five days' written notice, demanding payment of the delinquent rent within five days after the notice is received.
In Illinois, a landlord must give a tenant at least 60 days' written notice to terminate which of these tenancies? A) Tenancy at will B) Tenancy from year to year C) Tenancy at sufferance D) Tenancy for years
The answer is tenancy from year to year. In a tenancy from year to year, at least 60 days' written notice is required at any time within the four-month period before the last 60 days of the lease period.
If a tenant moved out of a rented store building because access to the building was blocked as a result of the landlord's negligence, the A) tenant would have no legal recourse against the landlord. B) landlord would be liable for the rent until the expiration date of the lease. C) tenant would be entitled to recover damages from the landlord. D) landlord would have to provide substitute space.
The answer is tenant would be entitled to recover damages from the landlord. If a landlord breaches any clause of a lease agreement, the tenant has the right to sue and recover damages against the landlord. If the leased premises become unusable for the purpose stated in the lease, the tenant may have the right to abandon the premises.
A tenant rents an apartment in a 100-unit highrise in a Chicago suburb for $900 per month. The tenant decides to move when she learns that her rent will be raised by 25% at the expiration of her one-year lease. When she moved in, the tenant deposited $1,200 as a security deposit. How will the interest paid on the tenant's deposit be determined? A) Under these facts, the tenant is not entitled to receive interest on her security deposit. B) The interest paid should be 5% per year, from the date of deposit. C) The interest rate should be computed at a rate equal to that paid on a minimum deposit passbook savings account at the state's largest commercial bank. D) The interest paid should be based on the prime rate as of December 31 of the calendar year preceding the rental agreement.
The answer is the interest rate should be computed at a rate equal to that paid on a minimum deposit passbook savings account at the state's largest commercial bank. Illinois lessees are entitled to receive annual interest on their security deposits. Landlords who receive security deposits on residential leases, on deposits held for more than six months, are required to pay interest from the date of the deposit at a rate equal to the interest paid on a minimum deposit passbook savings account of the state's largest commercial bank.
A landlord who owns a 20-unit apartment building in Decatur, Illinois, has held a tenant's security deposit for three months. The tenant, who is on a month-to-month lease, informs the landlord that he will be vacating the apartment in 30 days. Based on these facts, which of these statements is TRUE? A) The landlord owes the tenant no interest on the security deposit. B) The landlord must pay the tenant four months' interest on the security deposit. C) If the tenant vacates the premises in these circumstances, the landlord is entitled to retain the security deposit as statutory damages. D) The tenant is entitled to three months' interest on the security deposit.
The answer is the landlord owes the tenant no interest on the security deposit. Illinois lessees in properties of 25 or more units are entitled to receive annual interest on their security deposits.
In Illinois, which of these statements is TRUE regarding a lease for more than one year? A) The lease must be in writing and signed to be enforceable in court. B) The lease must be recorded to give actual notice of the resident tenant's right of possession. C) The lease must include a provision for interest to be paid on all security deposits. D) The lease may be terminated only by written notice to the tenant, even if it contains a definite expiration date.
The answer is the lease must be in writing and signed to be enforceable in court. The statute of frauds in Illinois requires that lease agreements be in writing to be enforceable if they are for more than one year. Written leases should be signed by both lessor and lessee.
reversionary right
The landlord retains a reversionary right to possession after the lease term expires. The lessor's interest is called a leased fee estate plus reversionary right.
Under the federal Fair Housing Act, a landlord is required to modify property for tenants with disabilities at the landlord's expense. True False
The statement is false. The federal Fair Housing Act makes it illegal to discriminate against prospective tenants on the basis of physical disability. Tenants with disabilities must be permitted to make reasonable modifications to a property at their own expense. However, if the modifications would interfere with a future tenant's use, the landlord may require that the premises be restored to their original condition at the end of the lease term at the tenant's expense.
A lease is a type of contract and to be valid, it must simply meet the same requirements as any other contract. True False
The statement is true. To be valid, a lease must satisfy the elements of any other contract: capacity to contract, legal objectives, offer and acceptance, and consideration.
il lead base paint
This act is bolstered in its scope by the federal legislation noted earlier. When a mitigation order is issued to an owner of a building containing lead hazards, the owner has 90 days to eliminate the hazard in a manner prescribed by state law, or 30 days if occupied by a child under age six or by a pregnant woman
ground lease
When a landowner leases unimproved land to a tenant who agrees to erect a building on the land
A net lease is A) a lease in which the tenant pays rent plus maintenance and property charges. B) a lease in which the tenant pays the landlord a percentage of the monthly profits derived from the tenant's commercial use of the property. C) an agreement in which the tenant pays a fixed rent and the landlord pays all taxes, insurance, and other charges on the property. D) a lease-purchase agreement in which the landlord agrees to apply part of the monthly rent toward the ultimate purchase price of the property.
a
right of first refusal clause
allowing the tenant the opportunity to buy the property before the owner accepts an offer from another party.
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). This estate can arise when a tenant for years fails to surrender possession at the lease's expiration and continues until the landlord completes the eviction process. An estate at sufferance also can occur by operation of law when a borrower continues in possession after a foreclosure sale and beyond the redemption period's expiration.
lease purchase
combines a lease and a sales agreement
A tenant enters into a commercial lease that requires a monthly rent based on a minimum set amount plus an additional amount determined by the tenant's gross receipts exceeding $5,000. This type of lease is called a A) standard lease. B) gross lease. C) net lease. D) percentage lease.
d
A landlord need not give any notice to a tenant before beginning eviction proceedings because the tenant already knows he is in violation of the lease agreement. True False
f
In a net lease, the tenant pays a fixed rent and the landlord pays all taxes, assessments, insurance, maintenance, and utilities connected with the property. True False
f
termination of Farm tenancies from year to year
four months' written notice to terminate and may do so only at the end of the period. To vacate March 1, farm tenancy notice must be given by November 1
estate at will
gives the tenant the right to possess property with the landlord's consent for an unspecified or uncertain term. An estate at will is a tenancy of indefinite duration
what are the 3 types of leases?
gross lease, net lease, percentage lease
graduated lease
hich provides for specified rent increases at set future dates. Another is the index lease, which allows rent to be increased or decreased periodically, based on changes in the consumer price index or some other economic indicator.
lease
is a contract between an owner of real estate (the lessor) and a tenant (the lessee). It is a contract to transfer the lessor's rights to exclusive possession and use of the property to the tenant for a specified period.
gross lease ex
land owner pays all of the buildings expenses
referal fee
refers no more than three prospective lessees in any 12-month period; receives compensation of no more than $1,500 or the equivalent of one month's rent, whichever is less, in any 12-month period; and limits his activities to referring prospective lessees to the owner (or the owner's agent) and does not show units, discuss lease terms, or otherwise participate in the negotiation of a lease.
percentage lease ex
rent is based on the renters grosss income
estate for years
s a leasehold estate that continues for a definite period of time. That period may be years, months, weeks, or even days. An estate for years always has specific beginning and ending dates.
estate from period to period
s created when the landlord and the tenant enter into an agreement for an indefinite time—that is, the lease does not contain a specific expiration date. Such a tenancy is created for a specific payment period—for example, month to month, week to week, or year to year—but continues indefinitely until proper notice of termination is given. Rent is payable at definite intervals. An estate from period to period is characterized by continuity because it is automatically renewable under the original terms of the agreement until one of the parties gives notice to terminate.
As with any other contract, a lease is discharged when the contract terminates. True False
t
In a triple-net lease, the tenant pays all operating expenses in addition to rent. True False
t
if the court rules in favor of the landlord in eviction proceedings, a judgment for possession will be entered, and an order of possession will be issued by the clerk of the court. True False
t
net lease
tenanat pays some or all of the buildings expesnes
ground lease ex
tenant agrees to build the building
sales and leaseback eex
tenant and seller are the same
A ground lease is usually A) short term. B) for 100 years or longer. C) long term. D) a gross lease.
the answer is long term. Ground leases usually involve separate ownership of the land and buildings. These leases must be for a long enough term to make the transaction desirable to the tenant investing in the building, and often run for terms of 50 to 99 years.
net lease
the tenant pays all or some of the operating expenses in addition to the rent. The monthly rental constitutes net income for the landlord after operating costs have been paid. Leases for commercial or industrial buildings and the land on which they are located are usually net leases
lease purchase
used when a tenant wants to purchase the property but is unable to do so. Perhaps the tenant cannot obtain favorable financing or clear title, or the tax consequences of a current purchase would be unfavorable. In this arrangement, the purchase agreement is the primary consideration, and the lease is secondary. Part of the periodic rent is applied toward the purchase price of the property until that price is reduced to an amount for which the tenant can obtain financing or purchase the property outright, depending on the terms of the lease-purchase agreement.
actual eviction
when a tenant breaches a lease or improperly retains leased premises, the landlord may regain possession through a legal process. The landlord must serve notice on the tenant before commencing the lawsuit. Most lease terms require at least a 10-day notice in the case of default.
