Chapter 5
Managing Leases

Statute of frauds/leasehold provisions

l   All should be in writing

l   Leases over one year must be in writing

l   Negotiators of a lease greater than one year must be the owner, non-commissioned employee or hold real estate license

Requirements of a written lease

l   Names of parties

l   Conveyance

l   Description of premises

l   Term

l   Amount of rent and manner of payment

l   Duties and obligations of parties

l   Signatures

Addition lease clauses

l   Tax stops

l   Expense stops

l   Use of premises

l   Condemnation

l   Assignment and subletting provisions

Types of tenancies
Definite (estate for years)

l   Specific beginning and ending dates

l   Hold over tenant can be charged double rent if tenant does not continue to pay rent

l   Constructive renewal results in only a periodic tenancy

l   Assignment of subletting, sandwich lease

Types of Tenancies
Indefinite

l   Periodic tenancy

   90 days notice for year to year

   30 days notice for month to month

   7 days for week to week

l   Tenancy at will: In Pennsylvania construed to be periodic based upon payment pattern (normally monthly)

l   Tenancy at sufferance

l   Constructive eviction

Types of Rental Payment Provisions

l   Straight lease, flat lease, fixed payment

l   Escalating lease:  fixed period increases

l   Indexed leased:  tied to index

l   Percentage or participation lease

l   Net lease

l   Net/net or triple net

l   Ground lease

   Reversion of improvements

   Subordination

   Condemnation

Owner Remedies for Tenant Noncompliance

l   Noncompliance with Rental Agreement

l   Suit for Eviction

l   Default

l   Bankruptcy

l   Illegal Activities