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Chapter 17: Real Estate Leases

A tenant’s right to occupy land and/or buildings thereon.

LEASEHOLD ESTATE

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Lessee = TenantLessor = Owner = LandlordReversion = right of owner to retake the property at end of leased period.

LEASEHOLD ESTATE

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Lessor & LesseeDescription of premisesAgreement to convey & accept

possessionRent payment provisionsStart date and duration of leaseSignature of parties to lease

VALID LEASE

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Estate for years- specific starting & ending date

Estate at will- terminated anytime by either party

Periodic estate- one that renews itself automatically

Tenancy at sufferance- holdover tenant

ESTATE PERIODS

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ConveyanceContractLandlord – Tenant lawsSetting RentsOption ClausesAssignment and Subletting © OnCourse Learning

THE LEASE DOCUMENT

Sam

ple

Leas

e

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Gross lease = Fixed rentGraduated rent = Step-up rent

payments over termPercentage lease = Rent is percent

of gross incomeNet lease = Rent plus increases in

expenses

Index lease = Rent tied to economic indicator

RENT

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Option clauseAssignmentSublettingGround leaseLease terminationEviction

LEASE TERMS

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Tenant selectionSecurity depositTenant retentionCollecting rentsOn-site managementOff-site management

PROPERTY MANAGEMENT

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EvictionEminent Domain

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LEASE TERMINATION

(1) to discourage the construction of new housing so that the resources could be channeled to war needs.

(2) to set ceilings so that American households would not drive up prices by bidding against each other for available rental housing.

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RENT CONTROL

Before BuyingAdvertisingTenant SelectionSecurity Deposit

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PROPERTY MANAGEMENT

Tenant Retention

LeasesCollecting RentEviction Problems

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PROPERTY MANAGEMENT

a term that refers to property management duties that are performed on the premises.

called a resident manager or superintendent.

resident manager and management company are fiduciaries of the property owner. © OnCourse Learning

ON-SITE MANAGEMENT

A rule of thumb in apartment management is that one on-site manager can handle 50 or 60 units alone.

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MANAGEMENT-UNIT RATIOS

Key Terms

Assignment CPM, RPA Gross lease Lessee Lessor Net lease Option clause

Quiet enjoyment Reversion Sublessee Sublessor Sublet

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