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primary goal is to earn for the owner the highest possible net return on the investment; second is to preserve the value of the property
A property manager is considered to be a general agent who has a fiduciary responsibility to there client. Management agreements are considered to be personal service contracts and usually terminate upon the death of either party. A property manager is usually paid a percentage of the gross or net income the property produces
Function of a property manager
- prepare a budget
- reserving funds for capital expenditures
- renting the property
- tenant selection
- collecting rent
- maintain relations
- maintain the property
A lease transfers the right of possession and use from a lessor (landlord) to a lessee(tenant). Demise means to transfer property rights with a lease.
A vaild lease
must contain an offer and acceptance, consideration, contractual capacity and have legal objectives. A valid lease will also contain the names of the parties, property description, rights and duties of the parties, and the signature of parties.
is where the tenant pays rent only
A net lease
is one where the tenant pay rent plus some or all of the expenses of ownership, such as real estate taxes and insurance
is one where the tenant's rent is based on a percentage of income received by a tenant. Percentage leases are used in commercial leasing. A percentage lease usually contain a fixed minimum called a base rent.
allows for a periodic step-up of rent
index lease or escaltionlease
is one that is tied to a money market index. Rent will increase or decrease according to the index
is a lease on land and is usually written as a net lease. A subordination clause in a ground lease places the interest of the lessor in a secondary position to that of a lender who finances a building constructed on leased land.
grown by tenants on leased land differ from sharecropping. Emblements are crops that are grown annually for commercial purpose; they are the personal property of a tenant
Discharge of leases
lease agreements may be terminated by surrender and acceptance, abandonment, condemnation, notice, expiration, or merger. Selling leased property or the death of the landlord or tenant does not normally terminate a lease
occurs when a breach by the landlord makes the premise unusable by the tenant