Contracts
Lesson Five
Learning Objectives
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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.
Leases
 Non-Freehold Estate
 Landlord/Lessor
 Tenant/Lessee
Categories of Lease Rights
 Estate for Years
 For a Definite Period of Time
Example:
6 months, One Year, Five Years
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
Tenancy at Will
At will of Owner
 Must give Notice to
Terminate Lease
 May Live in Home until it is
Torn Down
Tenancy at Sufferance
 A Tenant has Overstayed the
Lease Period
 In LA this is known as a
Holdover Tenant
Non-Farm Leases
 Usually for One Month Plus One
Week, Gives Another Month
Farm Lease
 Usually for One Year Plus One
Month, Gives Another Year
Types of Leases
Gross Lease
(Owner pays Expenses)
Net Lease
(Tenant pays Expenses)
Percentage Lease
Plus
$ 2,000
$ 2,500
$ 4,500
base rent
5% of the
$50,000 in sales
rent for the
month
Ground Lease
“Separate Immovable”
Step-Up Lease
325
300
275
250
Graduated Lease
Escalator Clause
$400
Increase Taxes & Ins.
$250
Sale & Leaseback
 Sale
 To Obtain Cash
 Lease Property from New
Owner
Re-Appraisal Lease
 $100,000 x 10% = $10,000
 $200,000 x 10% = $20,000
Index Lease
 Lease
 GNP
 New Rent
$10,000
8%
$10,800
Assignment
 Transfer of Rights to Third
Party
 Original Lessee is still
Responsible for Lease
 One Lease
Sub-Lease
 Transfer of Rights to Third
Party
 Two Leases
 Original Lessee is still
Responsible
Termination of Leases
Expiration of Time
Mutual Agreement
Breach of Contract
Death
10 Days Notice
Eviction
Actual Eviction
Tenants Fault
Constructive Eviction
Owners Fault
Security Deposit
 In LA Deposit must be returned
within 30 days less itemized list
of damages.
Statute of Fraud
 Requires all Contracts be in
writing to be enforceable.
 Oral Lease in LA are good
for any length.
Note:
In both cases it is still wiser to
write all leases and long term
leases should probably be
recorded.