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Chapter 17Chapter 17

Charles J.Jacobus

Thomas E.Gillett

© 2008 by South-Western, Cengage Learning

Georgia Real Estate Georgia Real Estate An Introduction to the ProfessionAn Introduction to the Profession

Seventh EditionSeventh Edition

Chapter 17Chapter 17

Real Estate LeasesReal Estate Leases

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Leasehold EstateLeasehold Estate

Lessee: Tenant

Lessor: Owner, Landlord

Reversion: right of owner to retake possession at end of leased period.

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Estate PeriodsEstate Periods

Leasehold Estate: tenant’s right to occupy

Periodic estate: definite period of time with automatic renewal

Estate for years: specific

starting & ending date

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Estate PeriodsEstate Periods

Estate at will: Indefinite period

Terminated by either party with notice

Tenant: 30 Days

Landlord: 60 Days

Estate at Sufferance: Tenant

remains beyond lease period

without consent

Holdover Tenant

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Valid LeaseValid 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

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LeasesLeases

In Georgia:

A lease for more than one year

must be in writing to be enforceable.

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The Lease DocumentThe Lease Document

Term: Clearly stated beginning & end

Use restrictions

Maintenance: Who is responsible?

Security Deposit: Breach or damage

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The Lease DocumentThe Lease Document

Quiet EnjoymentConstructive Eviction

Disrepair: excepting normal wear & tear

Destruction of premises:

Termination of leaseLandlord liability?

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Landlord-Tenant LawsLandlord-Tenant Laws

LandlordLimit security depositDeliver possession on agreed dateMaintain fit conditionNotice to enterProcedure for unreturned depositEviction procedure

TenantDays notice to vacateMay not damageObey rulesRight to make needed repairs

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RentRent

Gross lease: Fixed rent. Landlord pays expenses

Graduated rent:

Rent payments increase

over term

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RentRent

Percentage lease: Rent is percent of gross income

Net lease: Rent plus increases in expenses

Index lease: Rent tied

to economic indicator

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Lease TermsLease Terms

Option clause: right to purchase or lease at some future date

Lease OptionsOption to extend

Option to buy

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Lease TermsLease Terms

Assignment: total transfer of lessee's rights

AssignorRemains liable unless released

Assignee

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Lease TermsLease Terms

Sublet: Transfer a portion of rights

PremisesLease term

Sublessor: remains liable

Sublessee: pays rent to sublessor

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Lease TerminationLease Termination

EvictionActual Eviction: Landlord's remedy for Tenant’s breach of contract

Constructive Eviction: Tenant is forced to move due to inhabitable premises

Retaliatory Eviction: Tenant

evicted because he

complained.

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Lease TerminationLease Termination

Eminent DomainJust compensation

Partial take

ForeclosureMortgage predates the lease

Non-disturbance clause

Lease predates the

mortgage

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Property ManagementProperty Management

Residential property management

Commercial or Industrial management

On- site & Off-site

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Property ManagementProperty Management

Training Programs

IREM

CPM

ARM

BOIM

RPA

SMA

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Key TermsKey Terms

Assignment

CPM, RPA

Gross lease

Lessee

Lessor

Net lease

Option clause

Quiet enjoyment

Reversion

Sublessee

Sublessor

Sublet