© 2013 All rights reserved.Chapter 5 Part I Leases 1

New York Real Estate for Salespersons, 5th e

By Marcia Darvin SpadaCengage Learning

© 2013 All rights reserved.Chapter 5 Part I Leases 2

Chapter 5

The Contract of Sale and LeasesPart I Leases

© 2013 All rights reserved.Chapter 5 Part I Leases 3

Chapter 5 Key TermsActual eviction/

Constructive eviction/eviction

Graduated leaseGross lease/triple

net leaseGround leaseIndex leaseLandlease

LeaseLessee/lessorOption to renewPercentage leaseSecurity depositSublease

© 2013 All rights reserved.

Definition of a LeaseA lease is a contract

For a consideration (usually rent), a landlord transfers to the tenant a property interest, or possession, for a prescribed time

The landlord is the lessor

The tenant is the lessee

Chapter 5 Part I Leases 4

© 2013 All rights reserved.Chapter 5 Part I Leases 5

Leasehold Estates Possession of Leased Property

Estate for Years a fixed term

Periodic Estaterenews after a period of time

Estate at Will terminated by informal agreement

Estate at Sufferancepossession after agreement has terminated

© 2013 All rights reserved.Chapter 5 Part I Leases 6

Standard Residential Lease Provisions

The Lease

Capacity to contract

Demising clause

Description of premises

Competent, sane adults

Transfer ofpossession

Term of lease

No requiredlimit

Specification of

rent/paymentIn writing

Statute ofFrauds

Quietenjoyment

© 2013 All rights reserved.

Lease Requirements

Apartment Sharing

Assignment and Subletting

Improvement

Possession and Habitability

Security Deposit

Chapter 5 Part I Leases 7

© 2013 All rights reserved.Chapter 5 Part I Leases 8

Assignment and Subletting

Tenantowes rent

Tenantowes rent

Tenantpays

landlord

Tenantpays

landlord

Sublessee pays

tenant

Sublessee pays

tenant

SubleaseSubleaseLease

transfersto

assignee

Lease transfers

to assignee

Assigneepays

landlord

Assigneepays

landlord

Assigneeowesrent

Assigneeowesrent

Assign-ment

Assign-ment

© 2013 All rights reserved.Chapter 5 Part I Leases 9

Termination of a LeaseReason Explanation

Abandonment Tenant leaves

Death of property owner

Lease stays in effect

Actual eviction(Self-help)

Illegal forced eviction

Constructiveeviction

Withholding of rent if services not provided

Eviction Legal proceedingto evict

Lease Expiration Periodic or estate for years

Mutual agreement Both parties agree

© 2013 All rights reserved.

Death of Landlord or Sale of Property Death or Sale by

the Landlord A lease agreement

does not terminate upon the death of the landlord or the tenant

Death of the Tenant

Succession Rights to an Apartment

Succession Rights for Other Types of Properties

Generally, there is no “succession” in cooperatives and condominiums

Chapter 5 Part I Leases 10

© 2013 All rights reserved.Chapter 5 Part I Leases 11

Gross and Net Leases Gross lease-owner pays all expenses

Net lease-tenant pays some or all of expenses

© 2013 All rights reserved.Chapter 5 Part I Leases 12

Types of Leases Percentage

Ground

Index

Graduated