17: Leases

Unit 17: Leases

Actual Eviction

The legal process that results in tenants being physically removed from the leased premises.

Assignment

The transfer in writing of interest in a bond, mortgage, lease, or other instrument.

Cash Rent

In an agriculture lease, the amount of money given as rent to the landowner at the outset of the lease, as opposed to sharecropping.

Constructive Eviction

Actions of a landlord that so materially disturb or impair a tenant’s enjoyment of the leased premises that the tenant is effectively forced to more out and terminate the lease without liability for any further rent.

Estate at Surfferance

The tenancy of a lessee who lawfully comes into possession of a landlord’s real estate but who continues to occupy the premises improperly after lease rights have expired. Also called a tenancy at sufferance.

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. Also called a tenancy at will.

Estate for Years

An interest for a certain, exact period in property leased for specified consideration. Also called a tenancy for years.

Estate from period to period

An interest in leased property that continues from period to period—week to week, month to month, or year to year. Also called a tenancy from period to period.

Gross Lease

A lease of property according to which a landlord pays all property charges regularly incurred through ownership, such as repairs, taxes, insurance, and operating expenses. Most residential leases fall under this category.

Ground Lease

A lease of land only, on which the tenant usually owned a building or is required to build as specified in the lease. Such leases are usually long-term net leases; the tenant’s rights and obligations continue until the lease expires or is terminated through default.

Holdover Tenancy

A tenancy whereby a lessee retains possession of the leased property after the lease is expired and the landlord, by continuing to accept rent, agrees to the tenant’s continued occupancy as defined by state law.

Implied Warranty of Habitability

A theory in landlord/tenant law in which the landlord renting residential property implies that the property is habitable and fit for its intended use.

Lease

A written or oral contract between the landlord (the lessor) and a tenant (the lessee) that transfers the right to exclusive possession and use of the landlord’s real property to the lessee for a specified period of time and for a stated consideration (rent). By state law, leases longer than a certain period of time (generally one year) must be in writing to be enforceable.

Leasehold Estate

A tenant’s right to occupy real estate during the term of the lease, generally considered to be a personal property interest.

Lease Purchase

The purchase of real property, the consummation of which is preceded by a lease usually long term. Typically done for tax or financing purposes.

Month-to-Month Tenancy

A periodic tenancy under which the tenant rents for one month at a time. In the absence of a rental agreement (oral or written), a tenancy is generally considered to be month to month.

Net Lease

A lease requiring that the tenant pay not only rent but also costs incurred in maintaining the property, including taxes, insurance, utilities, and repairs.

Nondisclosure Clause

A mortgage clause stating that the mortgagee agrees not to terminate the tenancies of the lessees in the event the mortgagee forecloses on the mortgagor-lessor’s building.

Percentage Lease

A lease, commonly used for commercial property, whose rental is based on the tenant’s gross sales at the premises; it usually stipulates a base monthly rental plus a percentage of any gross sales above a certain amount.

Rental Finding Service

Any business that finds, attempts to find, or offers to find for any person for consideration a unit of rental real estate or a lessee for a unit of rental real estate not owned or leased by the business.

Reversionary Right

The return of the rights of possession and quiet enjoyment to the lessor at the expiration of a lease.

Right of First Refusal

A clause allowing the tenant the opportunity to buy the property before the owner accepts an offer from another party.

Security Deposit

A payment by a tenant, held by the landlord during the lease term and kept (wholly or partially) on default or destruction of premises by the tenant.

Sharecropping

In an agricultural lease, the agreement between the landowner and the tenant farmer to split the crop or the profit from its sale.

Sublease

The leasing of premises by a lessee to a third party for part of the lessee’s remaining term.