Deck 18: Leases

Question 1

Rent is generally payable in advance.

Answer 1

True

Question 2

A tenant's right to the leased premises is not subject to all the landlord's title defects.

Answer 2

False

Question 3

Failure of a landlord to perform obligations under a lease is always an excuse for the tenant not to pay rent.

Answer 3

False

Question 4

A percentage rent clause in a retail lease will generally provide that a percentage of the tenant's
net income will be paid to the landlord as rent.

Question 5

A lease without a specified term is deemed to be a perpetual lease.

Question 6

A tenant's right to the leased premises is subject to all the landlord's title defects.

Question 7

The tenant's contractual obligation to pay rent will continue even if the tenant has transferred
his or her interest in the lease and vacated the premises.

Question 8

Rent is generally payable in arrears.

Question 9

A percentage rent clause in a retail lease will generally provide that a percentage of the tenant's
gross sales or net sales on the premises will be paid to the landlord as rent.

Question 10

A CPI rent escalator in a lease protects the tenant against inflation.

Question 11

A lease in which the tenant pays rent plus all expenses of the premises is known as a net lease.

Question 12

A foreclosure of a prior mortgage on leased premises will not terminate the lease.

Question 13

A provision in a lease that prohibits a tenant from opening another store within a certain geographical area of the leased premises is known as a radius clause.

Question 14

A foreclosure of a prior mortgage on leased premises will terminate the lease.

Question 15

The clause in a lease that prohibits a tenant from opening another store within a certain geographical distance of the leased premises is known as a nondisturbance agreement.

Question 16

The tenant's obligation to pay rent under the lease will terminate upon the tenant's transfer of
the lease or the vacation of the premises.

Question 17

A lease in which the tenant pays rent plus all expenses of the premises is known as a gross lease.

Question 18

Failure of a landlord to perform obligations under a lease is not always an excuse for the tenant not to pay rent.

Question 19

A lease may provide that possession will begin several months in the future after the lease is signed.

Question 20

A lease must describe the property that is being rented.

Question 21

A transfer of a tenant's complete interest in a lease is known as an assignment.

Question 22

A CPI rent escalator in a lease protects the landlord against inflation.

Question 23

A mortgage holder's agreement to honor a tenant's lease upon foreclosure of the mortgage is
known as a subrogation.

Question 24

A transfer of a tenant's complete interest in a lease is known as a sublease.

Question 25

A landlord generally has a right to terminate a lease for tenant's default.

Question 26

A mortgage holder's agreement to honor a tenant's lease upon foreclosure of the mortgage is
known as an attornment.

Question 27

A subtenant is responsible to the original landlord for all lease covenants.

Question 28

A landlord's failure to perform under the lease generally does not give the tenant the right to terminate the lease.

Question 29

A landlord's failure to perform under the lease generally gives the tenant the right to terminate
the lease.

Question 30

A subtenant has no responsibility to the original landlord under the lease.

Question 31

Under common law, a tenant was obligated to continue paying rent even if the leased premises had been damaged or destroyed.

Question 32

The original tenant, after an assignment or sublease, is released from responsibility under the lease.

Question 33

An assignee of a lease under all circumstances is responsible for the lease covenants.

Question 34

A subtenant is responsible to the original landlord for rent but not for other lease covenants.

Question 35

A landlord may have a right to dispossess the tenant without termination of the lease for
tenant's default.

Question 36

A landlord's covenant that the tenant will peacefully and quietly enjoy the premises without
hindrance or interference by the landlord is known as a grace period.

Question 37

A mortgage holder's agreement to honor a tenant's lease upon foreclosure of the mortgage is
known as an estoppel.

Question 38

Under common law, a tenant was excused from the obligation to pay rent when the leased premises were damaged or destroyed.

Question 39

A lease provision that agrees to release a nd hold harmless both the landlord and the tenant from each other's actions in regard to any casualty to the premises impairs an insurance company's right of subordination.

Question 40

The original tenant, after an assignment or sublease, remains responsible under the lease.

Question 41

An obligation by a third party to pay a tenant's rent under a lease is known as a(n)

A) attornment.
B) sublet.
C) guaranty.
D) memorandum of lease.

Question 42

A landlord may not be able to proceed against which of the following parties in regard to violations of lease provisions?

A) Original tenant
B) Sublessee
C) Sublessor
D) Assignee

Question 43

Under a gross lease, a tenant would pay which of the following items?

A) Insurance
B) Utilities
C) Rent
D) All of the above

Question 44

A default by a landlord under the lease generally gives the tenant the right to

A) withhold rent.
B) sue the landlord for performance.
C) terminate the lease.
D) file a lien on the landlord's property.

Question 45

A lease provision that provides that rent will increase in a predetermined amount on a predetermined date is known as a

A) CPI escalator.
B) bump increase.
C) percentage rent clause.
D) net lease.

Question 46

Under a net lease, a tenant would pay which of the following items?

A) Utilities
B) Taxes on the property
C) Insurance
D) All of the above
E) None of the above

Question 47

Better Widget Company has signed a lease as the tenant of a warehouse. The lease require s Better Widget to pay rent and all other operating expenses of the property, such as taxes, insurance and utilities. Is this lease considered a "gross" lease or a "net" lease?

Question 48

A lease is entered into between landlord and tenant on May 10 and provides that the tenant shall take possession of the premises on August 1. The lease is effective and commences on

A) August 1.
B) May 10.
C) the date tenant actually takes possession of the premises.
D) none of the above.

Question 49

If a debtor does not reject a lease within the time period provided for in the bankruptcy act, the lease will be deemed automatically assumed.

Question 50

The Uniform Residential Landlord and Tenant Act provides that a landlord may not receive a security deposit from a tenant in an amount in excess of one month's rent.

Question 51

A lease provision that provides the landlord will not hinder or interfere with a tenant's possession of the premises is known as a(n)

A) grace period.
B) attornment, nondisturbance agreement.
C) quiet enjoyment provision.
D) waiver of landlord's right of subrogation.

Question 52

A lease provision that provides that landlord and tenant will hold each other harmless from one another's actions in regard to any casualty to the premises will impair an insurance company's right of:

A) attornment.
B) subrogation.
C) subordination.
D) redemption.

Question 53

A trustee or debtor in bankruptcy has 120 days after the bankruptcy petition has been filed to either reject or assume leases.

Question 54

A landlord's basic remedy/remedies for tenant's default under the lease is/are

A) sue the tenant for performance.
B) terminate the lease and sue for damages.
C) dispossess the tenant without termination of the lease and sue for damages.
D) (a) and (b) above
E) all of the above

Question 55

Typically the parties to an attornment nondisturbance agreement are

A) mortgagee and tenant.
B) mortgagor and landlord.
C) mortgagor and tenant.
D) landlord and tenant.

Question 56

The Uniform Residential Landlord and Tenant Act requires that the tenant be given at least 90 days to cure any defaults under the lease prior to termination of the lease by the landlord.

Question 57

The Uniform Residential Landlord and Tenant Act requires good faith in landlord and tenant dealings.

Question 58

Under the Uniform Residential Landlord and Tenant Act, a willful and negligent failure on the part of the landlord to provide heat, hot water, or other essential services gives the tenant a right to terminate the lease.

Question 59

The Uniform Residential Landlord and Tenant Act provides that a landlord cannot receive a
security deposit from a tenant in an amount in excess of three months' rent.

Question 60

A lease provision that prohibits a tenant from opening another store within a certain geographic area of the leased premises is called a(n)

A) waiver of subrogation.
B) estoppel.
C) radius clause.
D) quiet enjoyment provision.

Question 61

Richland Mall has rented retail space to a tenant, Better Ice Cream. After being in the space for several months, Better sells its business to Even Better Ice Cream and assigns its lease to Even Better Ice Cream. The assignment contains an assumption of lease obligations by Even Better. The ice cream business at the mall starts to melt and Even Better defaults on the lease. The landlord, Richland Mall, wants to sue both Better Ice Cream and Even Better Ice Cream for the delinquent rent. Will it be successful?

Question 62

Downtown Office Company, as landlord, has entered into an office lease with Hi -Tech, Inc. as tenant. Hi-Tech fails to make its rent payments. Downtown would like to evict and remove Hi- Tech from its space and relet the space. Downtown also wants to recover from Hi -Tech the difference in rent if it cannot relet the space for the same rent that Hi -Tech paid. Can Downtown do this?