1. Contracts
Lesson Five

2. Learning Objectives Review meaning of leasehold estate.
Learn and understand lease rights.
Become familiar with the various types of leases.
Explain how leases can be terminated.
Know the difference between actual and constructive eviction.
Statute of Frauds and Oral leases in relationship to lease enforcement.

3. Leases
Non-Freehold Estate
Landlord/Lessor
Tenant/Lessee

4. Categories of Lease Rights
Estate for Years
For a Definite Period of Time Example:
6 months, One Year, Five Years

5. Period to Period Six Months + One Day = Six Months
One Year + One Day = One Year
Five Years + One Day = Five Years
Must give written Notice to Terminate Listing

6. Tenancy at Will Must give Notice to Terminate Lease
At will of Owner
Must give Notice to Terminate Lease
May Live in Home until it is Torn Down

7. Tenancy at Sufferance A Tenant has Overstayed the Lease Period
In LA this is known as a Holdover Tenant

8. Non-Farm Leases Farm Lease
Usually for One Month Plus One Week, Gives Another Month
Farm Lease
Usually for One Year Plus One Month, Gives Another Year

9. Types of Leases Gross Lease (Owner pays Expenses) Net Lease
(Tenant pays Expenses)

10. Percentage Lease $ 2,000 base rent
Plus $ 2,500 5% of the $50,000 in sales
$ 4,500 rent for the month

11. Ground Lease
“Separate Immovable”

12. Step-Up Lease
325
300
275
250

13. Graduated Lease
Escalator Clause
$400
Increase Taxes & Ins.
$250

14. Sale & Leaseback
Sale
To Obtain Cash
Lease Property from New Owner

15. Re-Appraisal Lease
$100,000 x 10% = $10,000
$200,000 x 10% = $20,000

16. Index Lease
Lease $10,000
GNP 8%
New Rent $10,800

17. Assignment Transfer of Rights to Third Party
Original Lessee is still Responsible for Lease
One Lease

18. Sub-Lease Transfer of Rights to Third Party Two Leases
Original Lessee is still Responsible

19. Termination of Leases Expiration of Time Mutual Agreement
Breach of Contract
Death
10 Days Notice

20. Eviction Actual Eviction Tenants Fault Constructive Eviction
Owners Fault

21. Security Deposit
In LA Deposit must be returned within 30 days less itemized list of damages.

22. Statute of Fraud
Requires all Contracts be in writing to be enforceable.
Oral Lease in LA are good for any length.

23. Note:
In both cases it is still wiser to write all leases and long term leases should probably be recorded.