NJ REAL ESTATE VOCABULARY CH. 18

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THIS SECTION INCLUDES LEASES & TYPES OF TENANCIES, TYPES OF EVICTIONS

LEASE

AN AGREEMENT WHEREBY THE LANDLORD/LESSOR GIVES THE TENANT/LESSEE THE RIGHT TO USE SPECIFIC REALTY FOR A DEFINITE PERIOD, WITH CONSIDERATION BEING THE PAYMENT OF RENT

REVERSIONARY INTEREST

UPON EXPIRATION OF THE LEASE, THE RENTED PREMISES WILL AUTOMATICALLY REVERT TO THE LESSOR

ESTATE FOR YEARS

ALSO KNOWN AS A "TENANCY FOR YEARS", IS A LEASE FOR A FIXED OR DEFINITE PERIOD OF TIME BY AGREEMENT BETWEEN THE LESSOR AND LESSEE.

PERIODIC TENANCY

EXISTS WHEN A RENTAL PERIOD IS FROM PERIOD TO PERIOD SUCH AS WEEK TO WEEK, MONTH-TO-MONTH OR YEAR-TO-YEAR

TENANCY AT WILL

IS AN UNCOMMON ARRANGEMENT THAT ALLOWS A TENANT TO USE OR OCCUPY LANDS AND BUILDINGS AT THE WILL OF THE OWNER/LESSOR.

TENANCY AT SUFFERANCE

ARISES WHEN A TENANT COMES INTO POSSESSION OF PROPERTY LAWFULLY, THEN WRONGFULLY REMAINS IN POSSESSION AFTER HIS LEASE HAS EXPIRED WITHOUT THE CONSENT OF THE LANDLORD

GROUND LEASE

IS USUALLY A "TENANCY FOR YEARS" WHEREBY THE PARCEL OF REAL PROPERTY IS LEASED, USUALLY FOR A LONG PERIOD OF TIME. IT GENERALLY PROVIDES THAT A BUILDING SHALL BE ERECTED ON THE LAND BY THE TENANT, AND A PROVISION IS ALSO MADE AS TO THE DISPOSITION OF THIS BUILDING AT THE END OF THE LEASE TERM

STEP-UP

ALSO KNOWN AS A "GRADUATED LEASE" ALLOWS FOR PERIODIC INCREASES DESIGNED TO OFFSET INFLATION

COMMERCIAL LEASE

A LEASE FOR COMMERCIAL PROPERTY THAT IS NORMALLY WRITTEN AS A TENANCY FOR YEARS

NET LEASE

REQUIRES THE TENANT TO PAY, IN ADDITION TO THE FIXED RENT, ALL OF THE PROPERTY EXPENSES WHICH NORMALLY WOULD BE PAID BY THE OWNER. THESE INCLUDE EXPENSES SUCH AS REAL ESTATE TAXES, INSURANCE, AND MAINTENANCE.

GROSS LEASE

A LEASE IN WHICH THE TENANT PAYS A FLAT RENTAL AMOUNT AND THE LANDLORD PAYS FOR ALL PROPERTY CHARGES REGULARLY INCURRED BY OWNERSHIP.

PERCENTAGE LEASE

AN AGREEMENT WHEREBY THE RENT OF THE LESSEE IS TYPICALLY A FIXED MINIMUM RENT PLUS A PERCENTAGE OF THE GROSS VOLUME OF THE BUSINESS DONE ON THE LEASED PREMISES

RECAPTURE CLAUSE

ALLOWS THE LANDLORD TO CANCEL A "PERCENTAGE LEASE" IF THE VOLUME OF BUSINESS FALLS BELOW STATED FIXED MINIMUM

REAPPRAISAL LEASE

CALLS FOR PROPERTY APPRAISALS EVERY FIVE TO TEN YEARS AS THE BASIS FOR PERIODIC ADJUSTMENT IN THE RENT

OIL AND GAS LEASES

NOT ONLY GIVES THE LESSEE THE RIGHT TO USE THE PROPERTY, BUT IT GIVES THEM THE RIGHT TO TAKE SOMETHING FROM THE PROPERTY- SPECIFICALLY OIL AND GAS

ESCALATOR CLAUSE

PERMITS RENT INCREASES TO REFLECT INCREASED OPERATING EXPENSES SUCH AS HIGHER TAXES, MAINTENANCE COSTS, FUEL OIL, ETC.

EXPIRATION OF THE TERM

IS WHEN AN "ESTATE FOR YEARS" LEASE ENDS ON THE LAST DAY OF THE TERM STIPULATED IN THE LEASE

SURRENDER

WHEN THE LANDLORD AND TENANT MUTUALLY AGREE TO TERMINATE THE LEASE, FOLLOWED BY A DELIVERY OF POSSESSION OF THE LEASED PREMISES, THE TENANT IS RELEASED FROM ANY OBLIGATION

BREACH OF CONDITIONS

WHEN EITHER THE LANDLORD OR TENANT FAILS TO PERFORM ACCORDING TO THE CONDITIONS OF THE LEASE, THIS CONSTITUTES A BREACH OF LEASE, AND THE INJURED PARTY MAY BE PERMITTED TO CANCEL THE LEASE

ACTUAL EVICTION

IF THE TENANT IS OUSTED FROM THE PREMISES BY AN ACT OF THE LANDLORD OR A STRANGER HAVING SUPERIOR TITLE TO THE PROPERTY, THE TENANT IS REMOVED FROM THE PREMISES, AND IS NO LONGER LIABLE FOR THE RENT ACCRUING AFTER SUCH EVICTION

DISPOSSESS ACTION

ALSO KNOWN AS "UNLAWFUL RETAINER", IS THE LEGAL REMEDY OF A LANDLORD, WHICH IS USED AGAINST A TENANT WHO HOLDS OVER AFTER EXPIRATION OF THE LEASE TERM, CONTINUES IN POSSESSION AFTER DEFAULT OF THE RENTAL PAYMENT OR CONTINUES IN POSSESSION AFTER FAILURE TO PERFORM CONDITIONS OR COVENANTS OF THE LEASE AGREEMENT, PROVIDED HE IS GIVEN ADEQUATE AND PROPER NOTICE OF THE DEFAULT

CONSTRUCTIVE EVICTION

MAY BE DECLARED IF THE LANDLORD ALLOWS THE PREMISES TO BECOME UNINHABITABLE, OR VIOLATES THE CONVENANT OF QUIET ENJOYMENT. THE TENANT MAY THEN REMOVE HIMSELF FROM THE PREMISES.THIS IS A LEGAL MEANS IN WHICH A TENANT MAY BREAK A LEASE

PRIOR RIGHT

WHEN OTHERS WITH A SUPERIOR RIGHT OR CLAIM THAN THAT OF THE LESSEE CAN TERMINATE A LEASE. THIS INCLUDES FORECLOSURE ON A MORTGAGE OR OTHER LIEN, CONDEMNATION OF THE LEASED PREMISES, OR A LIFE TENANT DIES

ABANDONMENT

WHEN THE PREMISES IS VACANT AND THE RENT IS NOT BEING PAID

ASSIGNMENT OF LEASE

WHEN A LESSEE TRANSFERS TO A THIRD PARTY THE ENTIRE REMAINING BALANCE OF THE LEASE TERM FOR ALL OF THE LEASED PROPERTY

SUBLEASE

WHEN A LESSEE TRANSFERS A PORTION OF THE LEASE TERM TO A THIRD PARTY

OPTION

IS DEFINED AS A RIGHT THAT IS GIVEN FOR CONSIDERATION TO PURCHASE OR LEASE PROPERTY WITHIN A SPECIFIED TIME AT A SPECIFIED PRICE AND TERMS

RIGHT OF FIRST REFUSAL

THIS GIVES THE TENANT THE OPPORTUNITY TO MATCH THE TERMS OF A PROPOSED CONTRACT TO PURCHASE, BEFORE THE CONTRACT IS EXECUTED

HOLDOVER TENTANT

A TENANT WHO REMAINS IN POSSESSION OF A PROPERTY AFTER EXPIRATION OF THE LEASE TERM

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