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Chapters 11 & 12

Terms in this set (48)

Constructive Eviction
Actions of a landlord that so materially disturb or impair a tenants enjoyment of the leased premises that the tenant is effectively forced to move out and terminate the lease without any liability for any further rent.
Covenant of quiet enjoyment
The covenant implied by law by which a landlord guarantees that a tenant may take possession of leased premises and that the landlord will not interfere in the tenants possession or use of the property.
Estate at Sufferance
The tenancy of a lessee who lawfully comes into possession of a landlords real estate but who continues to occupy the premises after the lease has expired against the landlords wishes.
Estate at will
An estate that gives the lessee the right to possession until the estate is terminated by either party; the term of this estate is indefinite and no prior notice is needed to terminate. Indefinite term; possession with landlords consent.
Type of commercial leases
Percentage; Net; Graduated; Ground
Estate for years
A possessory interest in property for a definite period of time leased for a specified consideration. Any definite period.
Estate from period to period
A possessory interest in leased property that automatically renews from period to period. Notice is necessary to terminate. Also called periodic tenancy. Indefinite term; automatically renews.
Fixed Lease
Also known as gross lease. Residential lease
Full-service lease
Commercial leases that are often used in large office or multi-tenant building such as shopping centers, where the tenants share in overall operating expenses for the common areas and buildings. Tenants pay a base rate and prorated share of the complex's operating expenses.
Graduated lease
Commercial lease that contracts for pre-set rental increases over the lease period.
Gross lease
A lease of a property under which the landlord pays all property charges regularly incurred through ownership such as repairs, taxes, insurance, and operating expenses. Most residential leases are gross leased; a also called fixed rental lease or flat rental lease.
Essentials for a valid lease
Metal agreement; consideration; capacity to contract; legal objectives
Ground lease
A lease of land only on which the tenant is usually required to build as specified in the lease. Usually long term net leases
Holdover tenant
A person who retains possession of leased property after the lease has expired; the landlord may continue to accept rent or start eviction procedures
Implied warranty of habitability
A theory in tenant landlord law in which the landlord renting residential property implies that the property is habitable and fit for its intended use.
Index lease
A commercial lease that allows the periodic adjustment of rent based on the named index such as consumer price index.
Law of negligence
If a tenant or guest is injured on the landlord's rental property, the landlord, and his/her agent may be held liable due to their responsibility to maintain common areas and comply with residential rental agreement act.
Lease
A written or oral contract between landlord and tenant that transfers the right to exclusive possession and use of the landlords real property to the lessee for a specified period of time and for a stated consideration. Tenant may possess, occupy, and use the property.
Leasehold estate
A tenants right to occupy real estate during the term of a lease, generally considered a personal property interest; nonfreehold estate
Lessee
Tenant
Lessor
Landlord
Net lease
A lease requiring that the tenant pay rent plus some or all of the property charges, such as taxes, insurance, utilities, and repairs
North Carolina vacation rental act
Establishes uniform rules for landlords, tenants, and their agents, involved in handling short term rentals under 90 days, where the tenant has primary residence elsewhere. All rental agreements in writing; landlord collects advance payments which are placed in an escrow account for; landlord refunds tenant if place is inhabitable; new owner responsible for 180 days of previous owner rentals; expedited eviction process
Novation
Substituting a new contract for an old one or substituting new parties to an existing contract.
Percentage lease
Commercial lease commonly used for retain tenants; rent is based on tenants gross sales at the premises.
Periodic tenancy
Estate from period to period
Residential Rental Agreement Act
State law that mandates delivery of habitable residential rental units; obligations of the landlord and tenant are mutually dependent.
Retaliatory Eviction
Illegal eviction of a tenant that has exercised protected rights under the law.
Sandwich lease
Subleasors interest in real estate. Lessor still remains primary liability for paying rent.
Security Deposit
A payment by a tenant, held by a landlord during the lease term and kept on default or destruction of the premises by the tenant.
Self-help eviction
Illegal eviction practices used by landlords instead of lawful use of summary ejectment.
Subleases
Leasing of premises by a tenant to a third party for part of the lessee's remaining term
Summary ejectment
Legal eviction procedure heard before a magistrate for removal of a tenant that has breached the lease terms
Tenant Security Deposit Act
State act that regulates the amount and use of money that can be required as a security deposit and how landlords hold that deposit. Maximum amount if deposit depends on length on tenancy.
Budget comparison statement
Compares actual results with the original budget, often giving either percentages or a numerical variance of actual versus projected income and expenses.
Cash flow
Net spendable income from an investment, determined by deducting all operating and fixed expenses from the gross income. When expenses exceed income, a negative cash flow results
Effective Gross Income
The anticipated income from a rental property resulting from potential gross income minus an allowance for vacancy and bad debts.
Net operating income
The income projected for an income-producing property after deducting losses for vacancy and collection and operating expenses.
Operating expenses
Periodic and necessary expenses essential to the continuous operation and maintenance of an income property.
Potential gross income
The amount of rental income he property could produce with 100% occupancy and all tenants paying full rent; also called scheduled gross income
Profit and Loss Statement
A detailed statement prepared on a periodic basis showing the financial picture of the business through the revenues and expenses; also known as operating statement
Property management agreement
An agency contract between the owner of income property and a management firm or individual property manager that outlines the scope of the managers duties.
Property manager
Broker for who compensation preserves the value of an investment property while generating income as an agent for the owner. Duties include collecting rents; maintaining the property; and keeping up all accounting. Primary function is to preserve the value of an owners investment property while generating income for the owner. General Agent
Preventive maintenance
Helps prevents problems and expenses and includes regularly scheduled activities
Corrective maintenance
Corrects problems after they occurred. Includes actual repairs to keep things functioning as contracted for by the tenants.
Handling Risk
Avoid it; retain it; control it; transfer it
Rental schedule
A statement of proposed rental rates determined by the owner or property manager or both, based on buildings estimated expenses, market supply and demand, and the owners long range goals for the property.
Vacancy and collection losses
The amount of income lost due to empty units or tenants not paying full rent.
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