Lease: Wikis

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A lease is a contract conferring a right on one person (called a tenant or lessee) to possess property belonging to another person (called a landlord or lessor) to the exclusion of the owner landlord, and all others except with the invitation of the tenant. It is a rental agreement between landlord and tenant.[1] The relationship between the tenant and the landlord is called a tenancy, and the right to possession by the tenant is sometimes called a leasehold interest. A lease can be for a fixed period of time (called the term of the lease) but (depending on the terms of the lease) may be terminated sooner. The consideration for the lease is called rent or the rental.

A lease should be contrasted to a license, which may entitle a person (called a licensee) to use property, but which is subject to termination at the will of the owner of the property (called the licensor). An example of a license is the relationship between a parking lot owner and a person who parks a vehicle in the parking lot.

Under normal circumstances, owners of property are at liberty to do what they want with their property (for a lawful purpose), including dealing with it or handing over possession of the property to a tenant for a limited period of time. If an owner has surrendered possession to another (i.e., the tenant) then any interference with the quiet enjoyment of the property by the tenant in lawful possession is itself unlawful.

Similar principles apply to real property as well as to personal property, though the terminology would be different. Similar principles apply to sub-leasing, that is the leasing by a tenant in possession to a sub-tenant. The right to sub-lease can be expressly prohibited by the main lease, sometimes referred to as a "master lease".

Contents

Types of tenancies

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Fixed-term tenancy or tenancy for years

A fixed-term tenancy or tenancy for years lasts for some fixed period of time. Despite the name tenancy for years, such a tenancy can last for any period of time — even a tenancy for one week may be called a tenancy for years. At Common law the duration did not need to be certain, but could be conditioned upon the happening of some event, (e.g., "until the crops are ready for harvest" or "until the war is over"). In many jurisdictions that possibility has been partially or totally abolished.[2]

A fixed term tenancy comes to an end automatically when the fixed term runs out or, in the case of a tenancy that ends on the happening of an event, when the event occurs.

Periodic tenancy

A periodic tenancy, also known as a tenancy from year to year, month to month, or week to week, is an estate that exists for some period of time determined by the term of the payment of rent. An oral lease for a tenancy of years that violates the Statute of Frauds (by committing to a lease of more than — depending on the jurisdiction — one year without being in writing) may actually create a periodic tenancy, depending on the laws of the jurisdiction where the leased premises are located. In many jurisdictions the "default" tenancy, where the parties have not explicitly specified a different arrangement, and where none is presumed under local or business custom, is a month-to-month tenancy.

Either the landlord or the tenant may terminate a periodic tenancy at any time by giving the notice to the other party as required by statute or case law in the jurisdiction. Typically, the landlord must give six months' notice to terminate a tenancy from year to year. Tenants of lesser durations must typically receive notice equal to the period of the tenancy - for example, the landlord must give a month's notice to terminate a tenancy from month to month. However, many jurisdictions have varied these required notice periods, and some have reduced them drastically. For jurisdictions that have local rent control laws, a landlord's ability to terminate a residential tenancy is substantially reduced. For example, in California, the cities of Los Angeles, Santa Monica, West Hollywood, San Francisco, and Oakland have "rent stabilization ordinances" that limit a landlord's ability to terminate a periodic tenancy, among other restrictions.

The notice must also state the effective date of termination, which, in some jurisdictions, must be on the last day of the payment period. In other words, if a month-to-month tenancy began on the 15th of the month, in a jurisdiction with a last day requirement the termination could not be effective on the 20th of the following month, even though this would give the tenant more than the required one month's notice.

Tenancy at will

A tenancy at will is a tenancy which either the landlord or the tenant may terminate at any time by giving reasonable notice. It usually occurs in the absence of a lease, or where the tenancy is not for consideration. Under the modern common law, a tenancy at will is very rare, partly because it usually comes about if the parties expressly agree that the tenancy is at will and not for rent. A tenancy at will is common where a family member is allowed to live in a home (a nominal consideration may be required) without any formal arrangements. In most residential tenancies for a fixed term, for consideration, the tenant may not be removed except for cause, even if there is no written lease. (However, an oral lease for more than 12 months is not enforceable if the statute of frauds in the jurisidction includes leases of more than 12 months.) Alternatively, a tenancy at will may exist for a temporary period where a tenant wishes to take possession of a property and the landlord agrees, but there is insufficient time in which to negotiate and complete a new lease. In this case, the tenancy at will is terminated as soon as a new lease is negotiated and signed. The parties may also agree on the basis that if the parties fail to enter into a new lease within a reasonable time period, then the tenant must vacate the premises.

If a lease exists at the sole discretion of the landlord, the law of the jurisdiction may imply that the tenant is granted, by operation of law, a reciprocal right to terminate the lease at will. However, a lease that explicitly exists at the will of the tenant (e.g. "for as long as the tenant desires to live on this land") generally does not imply that the landlord may terminate the lease; rather, such language may be interpreted as granting the tenant a life estate or even a fee simple.

A tenancy at will is broken, again by operation of law, if the:

  • Tenant commits waste against the property;
  • Tenant attempts to assign the tenancy;
  • Landlord transfers his/her interest in the property;
  • Landlord leases the property to another person;
  • Tenant or landlord dies.

The specifics of these rules differ from jurisidction to jurisdiction

Subject to any notice required by law, a tenancy at will also comes to an end when either the landlord or the tenant acts inconsistently with a tenancy. For example, the changing of locks by the landlord is an indication of the end of the tenancy, as is the vacation of the premises by the tenant. However, in some jurisdictions, such as California, a landlord is prohibited from using a "self help" remedy, such as changing the locks, to terminate a tenancy, particularly a residential tenancy. Doing so may constitute a "constructive eviction" and expose the landlord to civil and criminal liability.

Tenancy at sufferance

A tenancy at sufferance (sometimes called a holdover tenancy) exists when a tenant remains in possession of a property after the expiration of a lease, and until the landlord acts to eject the tenant from the property. Although the tenant is technically a trespasser at this point, and possession of this type is not a true estate in land, authorities recognize the condition in order to hold the tenant liable for rent. The landlord may evict such a tenant at any time, and without notice.

The landlord may also impose a new lease on the holdover tenant. For a residential tenancy, this new tenancy is month to month. For a commercial tenancy of more than a year, the new tenancy is year to year; otherwise it is the same period as the period before the original lease expired. In either case, the landlord can raise the rent, so long as the landlord has told the tenant of the higher rent before the expiration of the original lease.

Formalities of a lease

The formal requirements for a lease are determined by the law and custom of the jurisdiction in which real property is located. In the case of personal property, it is determined by the law and custom of the jurisdiction in which the rental agreement is made.[3]

A tenancy for a duration greater than one year must be in writing in order to satisfy the Statute of Frauds.

Term of a lease

The term of the lease may be fixed, periodic or of indefinite duration.

If it is for a specified period of time, the term ends automatically when the period expires, and no notice needs to be given, in the absence of legal requirements.

The term's duration may be conditional, in which case it lasts until A specified event occurs, such as the death of a specified individual.

A periodic tenancy is one which is renewed automatically, usually on a monthly or weekly basis.

A tenancy at will lasts only as long as the parties wish it to, and may be terminated by either party without penalty.

It is common for a lease to be extended on a "holding over" basis, which normally converts the tenancy to a periodic tenancy on a month by month basis.

It is also possible for a tenant, either expressly or impliedly, to give up the tenancy to the landlord. This process is known as a surrender of the lease.

Rent

Rent is a requirement of leases in some common law jurisdiction, but not in civil law jurisdiction. In England it was held in the case of Ashburn Anstalt v Arnold that rent was not a requirement for there to be a lease, however the court will more often construe a licence where no rent is paid as it is seen as evidence for no intention to create legal relationship. There is no requirement for the rent to be a commercial amount. "Pepper corn" rent or rent of some nominal amount is adequate for this requirement.

Land lease

A land lease or ground lease is a lease in which the tenant rents and uses the land, but owns the temporary or permanent buildings and other objects placed upon it.

History

Over the centuries, leases have served many purposes and the nature of legal regulation has varied according to those purposes and the social and economic conditions of the times. Leases, for example, were mainly used for agricultural purposes until the late 18th century and early 19th century when the growth of cities in industrialised countries had made leases an important form of landholding in urban areas.

The modern law of landlord and tenant in common law jurisdictions retains the influence of the common law and, particularly, the laissez-faire philosophy that dominated the law of contract and property law in the 19th century. With the growth of consumerism, consumer protection legislation recognised that common law principles, which assume equal bargaining power between the contracting parties, create hardships when that assumption is inaccurate. Consequently reformers have emphasised the need to assess residential tenancy laws in terms of protection they provide to tenants. Legislation to protect tenants is now common.

References

  1. ^ Sullivan, Arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 523. ISBN 0-13-063085-3. http://www.pearsonschool.com/index.cfm?locator=PSZ3R9&PMDbSiteId=2781&PMDbSolutionId=6724&PMDbCategoryId=&PMDbProgramId=12881&level=4.  
  2. ^ For example in England and Wales the Law of Property Act 1925 s149(6) abolishes lease for lives, and lease expressed to be for a life is converted into a lease for 90 years.
  3. ^ For examples of what typical leases contain: , http://www.documatica-forms.com/usa/residential-rental-lease/more-info.php  

See also

External links


1911 encyclopedia

Up to date as of January 14, 2010

From LoveToKnow 1911

LEASE (derived through the Fr. from the Lat. laxare, to loosen), a certain form of tenure, or the contract embodying it, of land, houses, &c.; see Landlord And Tenant.


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Wiktionary

Up to date as of January 15, 2010
(Redirected to lease article)

Definition from Wiktionary, a free dictionary

Contents

English

Pronunciation

Verb

Infinitive
to lease

Third person singular
leases

Simple past
leased

Past participle
leased

Present participle
leasing

to lease (third-person singular simple present leases, present participle leasing, simple past and past participle leased)

  1. (transitive) To operate or live in some property or land through purchasing a long-term contract (or leasehold) from the owner (or freeholder).
  2. (transitive, obsolete) To gather what harvesters have left behind; to glean.

Translations

Noun

Singular
lease

Plural
leases

lease (plural leases)

  1. A contract granting use or occupation of property during a specified period in exchange for a specified rent
  2. The period of such a contract
  3. A leasehold

Translations

  • German: Pacht de(de) f.
  • Greek: σύμβαση μίσθωσης, μισθωτήριο, εκμίσθωση f.

Anagrams

  • Anagrams of aeels
  • easel

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