{"id":2786,"date":"2021-11-19T12:10:53","date_gmt":"2021-11-19T20:10:53","guid":{"rendered":"https:\/\/usezloan.com\/?p=2786"},"modified":"2021-11-19T12:12:00","modified_gmt":"2021-11-19T20:12:00","slug":"2786","status":"publish","type":"post","link":"https:\/\/usezloan.com\/index.php\/2021\/11\/19\/2786\/","title":{"rendered":"\ubd80\ub3d9\uc0b0 \uc9c0\uc2dd 20-Real Estate Leases-The Lease Contract"},"content":{"rendered":"

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\ubd80\ub3d9\uc0b0 \uc9c0\uc2dd 20-Real Estate Leases-The Lease Contract<\/span><\/span><\/strong><\/h3>\n

The Lease Contract
\nTypes of Lease
\nDefault and Termination
\nUniform Residential Landlord and Tenant Act<\/p>\n

 <\/p>\n

The Lease Contract<\/span><\/p>\n

A lease is both an instrument of conveyance and a contract between principal
\nparties to uphold certain covenants and obligations. As a conveyance, a lease
\nconveys an interest, called the leasehold estate, but does not convey legal title to
\nthe property. For this reason, a leasehold is also called a less-than-freehold
\nestate.
\nThe four principal types of leasehold estate are:
\n\uf034 estate for years: has a specific lease term
\n\uf034 estate from period-to-period: the lease term automatically
\nrenews
\n\uf034 estate at will: has no specified lease term
\n\uf034 estate at sufferance: a tenancy without consent
\nThe legal essence of a valid lease is that it conveys an exclusive right to use and
\noccupy a property for a limited period of time in exchange for rent and the return
\nof the property after the lease term is over. Leasehold estates are distinguished
\nfrom freeholds by their temporary nature. Every leasehold has a limited duration,
\nwhether the term is 99 years or not stated at all, as in an estate at will. While the
\nlease conveys exclusive use, it may also restrict such use to conform to the
\nlandlord’s desires. For example, an apartment lease may prohibit a tenant from
\nusing or storing hazardous materials within the premises.
\nLike other contracts, a lease becomes a binding agreement when the parties
\naccept the terms of the agreement and communicate their agreement to the other
\nparty. Recording of a leasehold conveyance is not a requirement for validity,
\nalthough it is usually good procedure to do so.
\nIn a lease arrangement, the owner is the landlord, or lessor, and the renter is
\nthe tenant, or lessee.<\/p>\n

 <\/p>\n

Leasehold rights
\nand obligations Tenant’s rights and obligations. A lease conveys a leasehold interest or
\nestate that grants the tenant the following rights during the lease term:
\n\uf034 exclusive possession and occupancy
\n\uf034 exclusive use
\n\uf034 quiet enjoyment
\n\uf034 profits from use
\nA tenant has the sole right to occupy and use the premises without interference
\nfrom outside parties, including the landlord. The landlord may enter the premises
\nfor specified purposes such as inspections, but the interference must be
\nreasonable and limited. In addition, the landlord can do nothing outside of the
\nlease’s express provisions that would impair the tenant’s enjoyment of income
\nderiving from use of the premises. For example, the landlord can not place a
\nkiosk in front of a retail tenant’s entry in such a way as to prevent customers
\nfrom entering the store.
\nThe lease defines the tenant’s obligations, which principally are to:
\n\uf034 pay the rent on time
\n\uf034 maintain the property’s condition
\n\uf034 comply with the rules and regulations of the building
\nLandlord’s rights and obligations. In conveying the leasehold estate, the
\nlandlord acquires a leased fee estate, which entails the rights to:
\n\uf034 receive rent
\n\uf034 re-possess the property following the lease term
\n\uf034 monitor the tenant’s obligations to maintain the premises
\nThe lease defines the landlord’s obligations, which principally are to:
\n\uf034 provide the necessary building support and services
\n\uf034 maintain the condition of the property
\nDeath of tenant or landlord. A valid lease creates obligations that survive the
\ndeath of the landlord or tenant, with certain exceptions. A tenant’s estate
\nremains liable for payment of rent if the tenant dies; the landlord’s estate
\nremains bound to provide occupancy despite the landlord’s death.
\nConveyance of leased property. The landlord may sell, assign, or mortgage
\nthe leased fee interest. However, transferring and encumbering the leased
\nproperty do not extinguish the obligations and covenants of a lease. Buyers and
\ncreditors, therefore, must take their respective interests subject to the terms of
\nthe lease.
\nContract
\nrequirements State contract laws determine the requirements for a valid lease. These
\nlaws generally require the following conditions.
\nParties. The principal parties must be legally able to enter into the agreement;
\ni.e., meet certain age, sanity, and other requirements.
\nChapter 7: Real Estate Leases 91
\nProperty description. The lease must identify the property by legal description
\nor other locally accepted reference.
\nExclusive possession. The landlord must provide an irrevocable right to
\nexclusive possession during the lease term, provided the tenant meets all
\nobligations.
\nLegal and permitted use. The intended use of the property must be legal. A
\nuse that is legal but not permitted does not invalidate the lease but constitutes
\ngrounds for default.
\nConsideration. The lease contract must be accompanied by consideration to the
\nlandlord for the rights conveyed. How the consideration is paid does not affect
\nthe lease’s validity, so long as the parties comply with the terms of the lease.
\nOffer and acceptance. The parties must accept the lease, and communicate
\ntheir acceptance to the other party, for the lease to take legal effect.
\nSignatures. The landlord must sign the lease to convey the leasehold interest. A
\ntenant need not sign the lease, although it is prudent to do so in order to enforce
\nthe terms of the lease. Multiple tenants who sign a single lease are jointly and
\nseverally responsible for fulfilling lease obligations. Thus, if one renter
\nabandons an apartment, the other renters remain liable for rent.
\nOral versus written form. Generally, a lease for a period exceeding one year
\ncannot be oral but must be in writing to be enforceable because of the Statute of
\nFrauds. An oral lease or rental agreement is legally construed to be a tenancy at
\nwill, having no specified term. Further, an oral lease terminates on the death of
\neither principal party.
\nLease clauses The clauses of a lease define the contractual relationship between landlord
\nand tenant. The most important and basic clauses are the following.
\nRent and security deposit. A rent clause stipulates the time, place, manner and
\namount of rent payment. It defines any grace period that is allowed, and states
\nthe penalties for delinquency.
\nThe lease may also call for a security deposit to protect the landlord against
\nlosses from property damage or the tenant’s default. State law regulates the
\nhandling of the security deposit: where it is deposited, and whether the tenant
\nreceives interest on the deposit. A landlord may require additional financial
\nsecurity from a tenant of dubious creditworthiness in the form of personal
\nguarantees, third party guarantees, or pledges of other property as collateral.
\nLease term. In the absence of an explicit term with beginning and ending date,
\na court will generally construe the lease to be a tenancy at will, cancelable upon
\nproper notice.
\nRepairs and maintenance. Repairs and maintenance provisions define the
\nlandlord’s and tenant’s respective responsibilities for property repairs and
\nmaintenance. Generally, the tenant is responsible for routine maintenance of the
\npremises while the landlord is responsible for general repairs. In residential
\nleases, the landlord is responsible for major repairs and capital improvements.
\nPayment of repairs and maintenance costs, however, is entirely negotiable
\nbetween landlord and tenant.
\n92 Principles of Real Estate Practice
\nSubletting and assignment. Subletting (subleasing) is the transfer by a tenant,
\nthe sublessor, of a portion of the leasehold interest to another party, the
\nsublessee, through the execution of a sublease. The sublease spells out all of the
\nrights and obligations of the sublessor and sublessee, including the payment of
\nrent to the sublessor. The sublessor remains primarily liable for the original
\nlease with the landlord. The subtenant is liable only to the sublessor.
\nFor example, a sublessor subleases a portion of the occupied premises for a
\nportion of the remaining term. The sublessee pays sublease rent to the sublessor,
\nwho in turn pays lease rent to the landlord.
\nAn assignment of the lease is a transfer of the entire leasehold interest by a
\ntenant, the assignor, to a third party, the assignee. There is no second lease, and
\nthe assignor retains no residual rights of occupancy or other leasehold rights
\nunless expressly stated in the assignment agreement. The assignee becomes
\nprimarily liable for the lease and rent, and the assignor, the original tenant,
\nremains secondarily liable. The assignee pays rent directly to the landlord.
\nAll leases clarify the rights and restrictions of the tenant regarding subleasing
\nand assigning the leasehold interest. Generally, the landlord cannot prohibit
\neither act, but the tenant must obtain the landlord’s written approval. The reason
\nfor this requirement is that the landlord has a financial stake in the
\ncreditworthiness of any prospective tenant.
\nRules and regulations. A tenant must abide by all usage restrictions imposed
\nby the lease’s rules and regulations for the property. These rules aim to protect
\nthe property’s condition as well as the rights of other tenants.
\nImprovements and alterations. A landlord typically wants to prevent a tenant
\nfrom making alterations that later tenants may not desire. By the same token, a
\ntenant who pays for an improvement wants to know who will own it at the end
\nof the lease term. An improvements and alterations clause therefore identifies
\nnecessary permissions and procedures, and who owns improvements.
\nCustomarily, tenant improvements become the property of the landlord in the
\nabsence of an express agreement to the contrary.
\nOptions. An option clause offers a tenant the opportunity to choose a course of
\naction at some time in the future under certain terms. Typical options are the
\nright to renew the lease, buy the property, and lease additional adjacent space. A
\ntenant does not have to exercise an option, but the landlord must comply if the
\ntenant does exercise it.
\nDamage and destruction. A damage and destruction provision defines the
\nrights and obligations of the parties in the event the leased premises are
\ndamaged or destroyed. State laws regulate such provisions.
\nChapter 7: Real Estate Leases 93
\nTYPES OF LEASE
\nGross lease
\nNet lease
\nPercentage lease
\nResidential lease
\nCommercial lease
\nGround lease
\nProprietary lease
\nLeasing of rights
\nGross lease A gross lease, or full service lease, requires the landl<\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

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