Chapter 16 Real Estate Leases

1
Chapter 16Real Estate Leases

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2
Leasehold Estate

• Lessee Tenant
• Lessor Owner Landlord
• Reversion right of owner to retake the property
  at end of leased period.

3
Estate Periods

• 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

4
Valid Lease

• Lessor Lessee
• Description of premises
• Agreement to convey accept possession
• Rent payment provisions
• Start date and duration of lease
• Signature of parties to lease

5
Sample Lease
6
Sample Lease (continued)

7
Rent

• Gross lease Fixed rent
• Graduated rent Step-up rent payments over term
• Percentage lease Rent is percent of gross
  income
• Net lease Rent plus increases in expenses
• Index lease Rent tied to economic indicator

8
Lease Terms

• Option clause
• Assignment
• Subletting
• Ground lease
• Lease termination
• Eviction

9
Property Management

• Tenant selection
• Security deposit
• Tenant retention
• Collecting rents
• On-site management
• Off-site management

10
Key Terms

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

• Quiet enjoyment
• Reversion
• Sublessee
• Sublessor
• Sublet