Texas Principles of Real Estate II - chapter 9

Implied Warrant of Habitability

A warranty that provides that leased premises must be fit, safe, and suitable for ordinary residential use. - Safe structure - maintain common areas - proper working unities - water (hot and cold) - trash pick up - manage of known toxins - safety from foreseeable crimes - pest extermination

leasehold estate

An interest in real property that gives a tenant a qualified right to possess and/or use the property for a limited time under a lease.

Texas Property Code 92.052

Landlord must repair when tenant gives proper notice at time of payment, is current on payment, affects the health. Doesn't have to repair if caused by tenant or if utilities are not available, doesn't have to have a security guard.

Texas Property Code 91.005

Tenant may not sublease without the landlords approval

termination of a lease

Term expiration Notice Voluntary agreement Property destruction Condemnation Foreclosure Breach of Contract/Default

a residential lease is usually

a form of gross lease in which the landlord pays all property expenses except the tenant's utilities and water, but can be a net lease too

Estate for Years

a lease that continues for a definite fixed period of time. The lease can be for specified length of time

percentage lease

a lease whose rental is based on a percentage of the monthly or annual gross sales made on the site

Uniform Residential Landlord and Tenant Act (URLTA)

a model law enacted as a blueprint for state laws to regulate leasing and management practices of landlords with residential properties

Estate from Period to Period (Periodic estate)

a month-to-month lease continues from period to period requires proper notice to terminate and has no definite ending date

commercial lease may be

a net, gross, or percentage lease if the tenant is a retail business

repair-and-deduct option

allows the tenant to arrange and pay for repairs, then deduct the amount from rent payments

lease

an instrument of conveyance and a contract between principal parties to uphold certain covenants and obligations

ground, or land lease

concerns the land portion of a real property

proprietary lease

conveys a leasehold interest to an owner of a cooperative

Estate at Sufferance

created when a tenant takes legal possession of the property but then remains on the property without the owner's consent after the lease terminates

Repairs and maintenance provisions

define the landlords and tenants respective responsibilities for property repairs and maintenance

Lead-based paint disclosure

disclose known lead-based paint and lead-based paint hazards and provide available written reports to buyers or renters give buyers and renters the pamphlet disclosure language for the existence of lead paint hazards must be included in sales contracts and leasing agreements Sellers, lessors, and real estate agents share responsibility for ensuring compliance

URLTA aims to

equalize and standardize rights of landlord and tenant protect tenants from unethical practices prevent unfair, complex leases and their enforceability

What can a landlord do if the tenant is in default?

file a suit for eviction/possession suit for damages

Law of Contracts

governs the making, interpretation and enforcement of leases

Residential leases differ from commercial and other types of lease in that

lease terms are shorter, typically one or two years lease clauses are fairly standard from one property to the next, in order to reflect compliance with local landlord-tenant relations laws lease clauses are generally not negotiable, particularly in larger apartment complexes where owners want uniform leases for all residents

important features of commercial leases

long term, ranging up to 25 years require tenant improvements to meet particular usage needs virtually all lease clauses are negotiable due to the financial magnitude of the transaction default can have serious financial consequences; therefore, lease clauses must express all points of agreement and be very precise

security deposit

money that a tenant deposits with the owner of the apartment for the repair of any damages to the apartment for which the tenant is responsible

Estate at Will

no time limit on these estates. The possession is given with permission but there is no agreement about rent. It can be terminated by either party at any time with proper notice

The deductions for repairs for any month may not exceed... How much?

one month's rent or $500 whichever is greater

index lease

provides for the adjustment of rent according to changes in a price index

The Fair Housing Amendments Act applies to

public use areas, the common use areas, and the individual apartments at a housing facility, regardless of whether it is privately or publicly owned

Return on Security Deposit

refund within 30 days or 60 if commercial. Tenant must provide forwarding address to receive refund.

The Texas Statute of Frauds

requires that the lease be in writing and signed by both parties, the lessor and lessee

gross lease or full service lease

requires the landlord to pay the property's operating expenses, including utilities, repairs, and maintenance, while the tenant pays only rent

disclosure of sex offenders

single family rental houses not required multiple-dwelling rental properties that common law states the necessity to disclose to all applicants that a sex-offender lives in the area

Keating Memo

states that a reasonable occupancy is two people per bedroom, and an infant less than six months old can sleep in the parent's bedroom

abondonment

tenant leaves property and demonstrates no intention of fulfilling the obligations of the lease, the landlord may re-take possession and pursue legal recourses for default. In such a case, the tenant remains liable for payment of rent.

Texas Property Code 92.010

the landlord has the right to set a maximum number of adults age 18 or older in his property. Texas law allows the landlord to set that maximum to three times the number of bedrooms.

graduated lease

the rent payments start at a fixed amount but increase as the lease term matures

net lease

the tenant pays not only the rent for occupancy, but also pays maintenance and operating expenses such as taxes, insurance, utilities and repairs

Subletting (subleasing)

the transfer by a tenant, the sublessor, of a portion of the leasehold interest to another party, the sublessee, through the execution of a sublease. The sublease spells out all of the rights and obligations of both parties, including the payment of rent to the sublessor. The original tenant remains primarily liable for the original lease with the landlord. The subtenant is liable only to the original tenant.

Assignment

the transfer of contractual rights to a third party. the assignee becomes primary liable and pays directly to the landlord. Original tenant is secondary liable.

default

violates any of the terms and covenants of the lease has breached the contract

Statute of Frauds

A state statute under which certain types of contracts must be in writing to be enforceable.

requirements for making a valid lease

Capacity to contract Demising clause Description of the premises Clear statement of term Specification of rent and how it is to be paid In writing Signatures Delivery Plain language requirement Use of the premises Lease renewals

basic types of leasehold estates

Estate for Years Estate from Period to Period (Periodic estate) Estate at Will Estate at Sufferance

tenant rights

Exclusive possession and occupancy Exclusive use Quiet enjoyment Profits from use

Fair Housing laws for landlords

How the landlord advertises a rental The questions the landlord asks on a rental application or when interviewing potential tenants The screening fee the landlord charges tenants How the landlord deals with tenants who rent from him or her

Constructive Eviction

Occurs when the tenant's use of the premises is substantially disturbed or interfered with by the landlord's actions or failure to act where there is a duty to act. The tenant is effectively forced to move out and terminate the lease without further liability for further rent.

State contract laws generally require the following conditions for a lease contract

Parties Property description Exclusive possession Legal and permitted use Consideration Offer and acceptance Signatures Oral versus written form

landlord's obligations

Provide the necessary building support and services Maintain the condition of the property

landlord's rights

Receive rent Re-possess the property following the lease term Monitor the tenant's obligations to maintain the premises

A lease automatically terminates under which of the following circumstances?

The leased property is foreclosed.

Actual Eviction

The legal process that results in the tenant's being physically removed from the leased premises.

tenant's obligations

The tenant has an obligation to pay a specified rent at specified times or, if none is specified, to pay a reasonable amount at the end of the term