Lesson 6 - Section 4: Leases - Commercial Leases, Ground Leases, Leasehold Properties

Gross Lease

______________ is a rental agreement where the tenant pays a fixed rate, while the landlord is responsible for paying property taxes, insurance, and most operational expenses.

Net Lease

______________ is a commercial agreement where the tenant pays a fixed rent plus some or all of the property's "net" expenses, such as taxes, insurance, and maintenance costs.

Percentage Lease

______________ is a common retail lease where the rent is calculated as a percentage of the tenant's gross sales, often including a base minimum rent.

Common Area Maintenance (CAM)

______________ is a fee paid by commercial tenants to cover the costs of shared facilities like parking lots, landscaping, and security.

Ground Lease

______________ is a long-term agreement (often up to 99 years) where a tenant leases the land but owns the buildings or improvements built upon it.

Leasehold Ownership

______________ is a type of interest in real property where the purchaser has the right to use and occupy the property for a finite period as stated in a lease.

Lessor

______________ is the owner of the land (the landlord) who grants the lease to the tenant.

Lessee

______________ is the holder of the lease (the tenant) who typically owns the improvements and is responsible for maintenance, taxes, and insurance during the lease term.

Assignment of Lease

______________ is the legal document in Hawaii that identifies the ownership of a leasehold property and transfers the interest from one party to another.

Residential Leasehold Disclosure Act

______________ is a Hawaii law requiring a specific statement be signed at escrow to ensure buyers understand they are not acquiring the land and that there is risk in purchasing a leasehold property.

Surrender Clause

______________ is a provision in a ground lease that specifies whether improvements become the property of the lessor or must be removed by the lessee when the lease ends.

10-Day Lease Review Period

______________ is the timeframe in Hawaii during which a seller must provide lease documents and a buyer has the right to cancel the contract after reviewing them.