Real Estate Principles Tenth Edition An Introduction to the Profession Tenth Edition

Chapter 17 Real Estate Leases _________________________

Leasehold Estate Lessee = Tenant Lessor = Owner = Landlord Reversion = right of owner to retake the property at end of leased period.

Estate Periods Estate for years- specific starting & ending date Estate at will- terminated anytime by either party Periodic estate- one that renews itself automatically Tenancy at sufferance- holdover tenant

Valid Lease Lessor & Lessee Description of premises Agreement to convey & accept possession Rent payment provisions Start date and duration of lease Signature of parties to lease

Sample Lease

Sample Lease (continued)

Rent Gross lease = Fixed rent Graduated rent = Step-up rent payments over term Percentage lease = Rent is percent of gross income Net lease = Rent plus increases in expenses Index lease = Rent tied to economic indicator

Lease Terms Option clause Assignment Subletting Ground lease Lease termination Eviction

Property Management Tenant selection Security deposit Tenant retention Collecting rents On-site management Off-site management

Key Terms Assignment CPM, RPA Gross lease Lessee Lessor Net lease Option clause Quiet enjoyment Reversion Sublessee Sublessor Sublet