Chapter 16 - Leases

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Chapter 16 - Leases Powered By Docstoc
					Chapter 16 - Leases

   D. Zaharopoulos
        Definition of a Lease
A contract between owner of real estate
  and tenant (LESSEE)
To transfer rights of exclusive possession
  and use in exchange for the payment of
  rent and other obligations
          Owner (LESSOR)

• Retains the reversionary right to

• Lessor’s interest is now a leased fee
  estate plus reversionary right.
         Tenant (LESSEE)
• Occupancy but no ownership rights
• Occupancy right terminates at some point

• A lease is both a conveyance & a contract
• Establishes a lawful leasehold estate
    Requirements of a Valid Lease
•   Capacity to contract
•   Legal objective
•   Offer & acceptance
•   Consideration
           4 Leasehold Estates
1. Estate for years (tenancy for years)

•   Termination date is fixed & known
•   Lease does not automatically renew
•   Notice to vacate at end of period not required
•   Lease survives the death of the landlord
           4 Leasehold Estates
2. Periodic Estate           (Estate from Period-to-Period)

• Duration based upon an interval of time (month-to-month)
• Lease automatically renews for another interval
• Notice to terminate must be given in order to
  state the termination date
• Lease survives the death of the landlord
         4 Leasehold Estates
3. Estate at Will (tenancy at will)

• Based upon intent of the parties to the lease
• May be terminated by either party without cause
  when sufficient notice is given
• “you can rent my home until sold”
• Usually informal and oral
• Automatically terminates at the death of either
         4 Leasehold Estates
4. Estate at Sufferance

• Terminated lease with holdover tenant
• Exists without landlord’s consent
            Lease Agreements
• Complete description of premises, including
  specific facilities included
• Dates should be precisely stated
• Use of premises
• Security deposit (AZ specific discussed later)
• Rules & regulations

• Generally, neither party is required to
  make improvements
• Tenant may make improvements with
• Any trade fixtures should be identified in
  the lease
• Federal Fair Housing Act: illegal to
 discriminate on basis of physical

• Americans with Disabilities Act:
 applies to commercial, nonresidential

– Maintenance of premises
– Destruction of premises
– Assignment & subleasing
– Options
           Types of Leases
•   Gross
•   Net
•   Percentage
•   Variable
•   Ground
•   Oil & gas
         Fair Housing Laws
Title VIII-Civil Rights Act of 1968 & FH
  Amendments Act of 1988 provide special
  protection to the following classes:

 race, color, religion, national origin,
 gender, handicap, familial status
 Covenant of Quiet Enjoyment

for tenant is implied by law regardless
  whether or not addressed in the lease.
Landlord obligations

–Maintain fit premises

–Security deposit
                    Notices required:

• Copy of Landlord Tenant Act (available at state office or

• Construction-improvements:
    Remedies for non-compliance by
•   Failure to return security deposit
•   Failure to deliver possession
•   Self-help for minor defects
•   Failure to supply essential services
•   Fire & casualty damage
•   Constructive eviction
    Remedies for non-compliance by
•   Failure to pay
•   5 day notice
•   Court date
•   Forcible entry & detainer
•   Writ of restitution
•   Actual eviction
    AZ Residential Landlord & Tenant Act

• Security deposit may not be more than 1 ½
  times the normal monthly rent
• Not obligated to put security deposit into an
  interest-bearing account
• Must specify what non-refundable amounts are
  included in the cleaning deposit

Landlord must provide tenants with:

• signed copy of lease
• Move-In Form
• Written notice of tenant’s right to be
  present at move-out inspection
• copy of ARLTA
      SUN           MON            TUE        WED           THUR         FRI         SAT
1              2              3          4             5            6 5-day     7
    Rent due                                                        Notice to

8              9              10         1110-day      12 Lawsuit   13          14
                                         Notice of     filed in
                                         noncompli     justice
                                         ance (5       court-
                                         days after)   approx 14

15             16             17         18            19           20          21

22             23             24         25            26 file      27          28
                                                       Entry &

29 72 hr       30 Sheriff     31
deadline       tapes
after court    eviction for
notice         5 pm; or

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