Chapter 6- Leasehold Estates (entire chap)

Constructive eviction

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suit for possession

A court suit initiated by a landlord to evict a tenant from leased premises after the tenant has breached one of the terms of the lease or has held possession of the property after the lease's expiration.

Leasehold estate

A tenant's right to occupy real estate for the term of the lease, generally considered to be a personal property interest.

Right of first refusal

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

Estate at will

An 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. It continues until it is terminated by either party giving proper notice. An estate at will automatically terminates by the death of either the landlord or the tenant.

Holdover tenancy

An estate from period to period can be created when a tenant with an estate for years remains in possession, or holds over, after the lease term expires. if no new lease agreement has been made, a holdover tenancy is created.

Estate for years

An interest for a specific time in property leased for a specific consideration. No notice is required to terminate an estate for years because the lease expires, and the tenant's rights are extinguished.

Sale and leaseback

Arrangement whereby the owners of the property sell the property and then lease it back for an agreed period and rental. This 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.

percentage lease

Either a gross lease or net lease. Generally used for retail businesses. Rent is based on a minimum fixed rental fee plus a percentage of the gross or net income received by the tenant doing business on the leased property

Estate at sufferance

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. The landlord can take one of three actions, 1 - accept rent offered by tenant, thereby creating a holdover tenancy. 2-the landlord can treat the tenant as a tenant as sufferance. 3- the landlord can treat the tenant as a trespasser and proceed with an eviction and damages action.

Purchase option

Grants the lessee the option to purchase the leased premises. This option normally gives the tenant the right to purchase the property at a predetermined price within a certain period.

Estate from period to period

Is created when landlord and tenant enter into an agreement for an indefinite time; that is, the estate does not contain a specific expiration date. The type of tenancy is created initially to run for a definite term-for instance, month-to-month, week-to-week, or year-to-year. This will continue indefinitely until proper notice of termination is given.

Warranty of habitability

PA courts recognize this doctrine for residential leases. , the obligation of a landlord to make repairs necessary to keep the premises fit to live in. Housing codes may prescribe in detail the required conditions of property

Gross lease

Residential, Lessee pays basic rent; Lessor pays property charges (taxes,repair costs, insurance and the like)

Actual eviction

The result of legal action, originated by a lessor, whereby a defaulted tenant is physically ousted from the rented property pursuant to a court order.

Reversionary rights

The return of the rights of possession and quiet enjoyment to the lessor at the expiration of a lease or life estate.

Assignment

The transfer in writing of interest in a bond, mortgage, lease, or other instrument.

sublease

The transfer of part of the term of a lease, but not the remainder of it, to someone else. The original tenant remains responsible for rent being paid by the new tenant and for any damage done to the rental during the lease term. The new tenant is responsible only to the original tenant to pay the rent due.

security deposit

Used if the tenant defaults on payment of rent or destroys the premises. Security deposits belong to the tenant and may not be considered the same as rent. (p.109)

Ground Lease

When a landowner leases unimproved land to a tenant who agrees to erect a building on it. Most often used in commercial and industrial property development. Usually run for terms of 50-99 years. Generally net leases: lessee pays rent on the ground and real estate taxes, insurance premiums, upkeep and repair costs

Net lease

commercial/industrial; tenant pays all or most of the operating expenses in addition to the rent. Monthly rental is net income for the landlord after operating costs have been paid. Most often associated with large commercial and industrial leases.

Lease

is a contract between an owner of real estate (the lessor) and a tenant (the lessee) A lease is a contract that transfers the lessor's rights to exclusive possession and use of the property to the tenant for a specific period of time.

Month-to-month tenancy

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

Lessor

owner

Protecting Tenants at Foreclosure Act-(PTFA) of 2009

requires that new owners of foreclosed properties follow certain requirements with regards to tenants that are current with their rental payments. The law's intent is to provide tenants with time to find alternative living arrangements after their landlord has lost the building. New owner intends to reside in the property - lease may be terminated upon 90 day notice. Otherwise, the new owner must provide 90 days notice prior to eviction and must allow tenants holding bona fide leases to stay for at least 90 days after foreclosure or through terms of the lease.

Lessee

tenant

Lease purchase

used when a tenant wants to purchase the property but is unable to do so. 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 it is reduced to an amount the tenant can obtain financing or purchase the property outright - depending on the terms if the agreement