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56 Cards in this Set

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Uniform Residential Landlord and Tenant Act

1973 - Regulates the relationship between landlord and tenant in residential leases.

Lease

A contract between a lessor and a lessee that transfers the right to exclusive possession and use of the property for a specified period of time in exchange for rent.

Lessor

Landlord

Lessee

Tenant

Subletting

Transferring part of a lessee's interest to another for a portion of the term of the lease.

Actual Eviction

The legal process that results in the tenant being physically removed from the leased premises.

Constructive Eviction

Actions of a landlord that disturb or impair a tenant's enjoyment of the leased premises and causes tenant to leave.

Assignment

When the right and interest in a property is transferred to another for the entire term.

Distraint

The landlord's legal right to seize a tenant's belongings for damages or rents in arrears under court order.

Public Accommodation

A privately owned entity that provides services or accommodations to the public.

Reversionary Rights

The right to take back possession of a property if lease ends.

Property Manager

One who manages properties in owner's best interest for compensation.




-Must hold a real estate license if managing 2 or more properties for someone else.


-Certified Property Manager (CPM) - Designation given by Institute of Real Estate Management (IREM).

Duties of a Property Manager

Achieve the owner's objectives by:


-Generate income for the owner and manage the staff.


-Preserve the value of the property.


-Securing suitable tenants through tenant screenings.


-Collecting rents.


-Caring for the premises through preventative, routine, and repair maintenance (broken items).


-Payments and other disbursement of funds.


-Monthly reports of income and expenses for the property.


-All rental agreements must be kept for 1 year from expiration date.



Property Management Classifications

-Residential


-Industrial


-Commercial


-Special Purpose



Definition of "Residential" classification:

-Single-family home used as rental properties (condos and vacation homes)


-Multifamily residences


-Property managers must obey all FFH laws regarding rental of residential property.

Definition of "Industrial" classification:

Both heavy and light manufacturing facilities and the land they are on.

Definition of "Commercial" classification:

-Includes types of income properties and public accommodation.


Liability:


-Must comply w/ ADA


If property has < or = 25 employees, ADA covers hiring of employees and interviewing potential tenants and must offer persons with disabilities full access to facilities and services.

Definition of "Special Purpose" classification:

Purpose of these facilities dictates design and function of organization such as nursing homes, theaters, and schools.

Management Contract

Contract between property owner and broker.


-Has nothing to do w/ RLTA.

Terms of a Management Contract

-Contracts begin by naming parties involved.


-Street address of property required.


-Must specify term of management.


-No single standard term; length depends mostly on the future intentions of owner.


-Specifies the agent's power to hire, fire and supervise personnel.


-Specify the authority to rent, operate, and manage the premises.


-Must have a beginning and ending date.


-Must have a termination provision.


-Must contain frequency on P&L and all reporting on property.


-Fiduciary responsibility.

Payment terms for a Management Contract

-Specify the amount of the fee and manner of payment.


-Can be flat fee or percentage which correlates w/ building revenue.


-Separate fee for activities.


-Bonus can be paid for reaching revenue goals.


-Finders fee - maybe paid to tenants, but not to leasing agent/company.


-Finders fee - Can't exceed $200 and cannot exceed 5 times in a 12 month period.


-Finders fee - Must be credit toward rent.

Property Manager's obligation upon Termination

-Immediately provide copies of rental agreements.


-W/I 5 days, provide a list of all tenant security deposits.


-W/I 35 days, provide reimbursements for all monies remaining in property accounts, except for unpaid obligations.


-W/I 75 days, provide final accounting of all monies, including bank reconciliation.

Record Keeping

-Property management financial records are kept for 3 years from their execution date.


-Property management agreements are kept for 5 years from their termination.


-Residential leases are kept until they are turned over to owner at termination of property management agreement or up to 1 year.


-Nonresidential leases are kept in individual folders and must contain documented trail of money and lease agreement.


-Fully executed residential lease agreements are not required to be reviewed and initialed by broker.


-Records can be kept on-site or off-site, if ADRE is notified in writing of address.

Influential laws to be aware of in property management:

-Fair housing laws include Americans with Disabilities Act (ADA).


-Health and building codes.


-Tax laws.


-Laws of Agency.


-State property code laws.

Uniform Residential Landlord and Tenant Act

1973


- Must give 48 hours notice to enter premises.


-Tenants are liable for guest's actions.


-No more than 2 persons per bedroom.


-Tenant must know rules at signing of rental agreement.


-Reversionary rights retained by landlord.

Residential rental property qualifications:

-80% or more of income is from dwelling units.


-In Arizona, all rental properties must be registered w/ county.


-Non-resident owners must appoint a statutory agent who lives in Arizona to represent them.

Lease (Overview)

-Lessor/Lessee.


-Statute of Frauds applies, except for a lease for 1 year or less.


-Leases are usually not recorded.


-Landlord and tenant must sign the lease.


-Most leases only allow subletting w/ owner's consent.


-Rent

Types of Rent

Contract Rent - Rental amount on the lease contract.




Economic Rent - Rental amount the current market is demanding.

Types of Leases:

-Gross Lease


-Net Lease


-Ground Lease


-Percentage Lease


-Lease Option


-Sale and Leaseback


-Graduated Lease


-Index Lease (escalation)

Gross Lease

-Tenant pays fixed rent


-Landlord pays all taxes, insurance, mortgage payments, repairs, etc. on the property.


-Most commonly used lease for residential purposes.

Net Lease

-Tenant pays rent and most of all property charges.


-Generally used for commercial or industrial properties.


-Generally long term.

Ground Lease (Land Lease)

-Leasing land alone.


-Used to separate ownership of land from building ownership.


-Usually 99 year lease.

Percentage Lease

-Lessee pays a percentage of his income.


-In addition to a Gross Lease or a Net Lease.


-Usually a retail operation.

Lease Option

First Right of Refusal - Gives tenant right to purchase property.


-Appurtenant.


-No extension beyond the terms of lease.


-Consideration can be rent.


-Delinquent rent payment can result in end of option.


-Can be assigned seperately.

Sale and Leaseback

Owner sells property on the market and then leases it back.

Graduated Lease

-Rent payments start at a fixed rate, but increase at set intervals during lease term.


-Often used for commercial tenant or in a tough economy.

Index Lease (Escalation)

-Rent adjusts according to changes in a price index.


-Often consumer price index or wholesale price index.

Valid Lease Components

-Legal ability to enter into a valid contract.


-Must be for a legal purpose.


-Offer and Acceptance - Two components of a valid lease, which consists of a meeting of the minds and the signatures of the lessor and less.


-Consideration - Rent (Assignable - Not personal , can usually be assigned, unless stated.


-Property description.


-Term of lease clearly labeled.

Arizona Landlord and Tenant Act:


Divorce

If a couple is going through the process of divorce, the spouse does not need to sign the lease (enforceable).

Arizona Landlord and Tenant Act:


Cancellation of month-to-month lease requires:

30-day notice to cancel agreement.

Arizona Landlord and Tenant Act:


Landlord can change property rules with:

30-day notice to tenants.

Arizona Landlord and Tenant Act:


Exemptions from act:



-Mobile homes


-Public housing


-Hotels


-Fraternity, sorority, dormitory

Inspection notice timeline:

Tenant has 5 days after occupancy to fill out and return move in inspection.

Tenant must be given upon move in:

-Name and address of property manager or owner.


-Notice where to obtain free copies of the Landlord Tenant Act.


-Move in inspection form (identifies pre-existing conditions).


-Pool safety notice.


-Lead-based paint disclosure for property.


-Bed bug educational materials.

Bedbug education materials/restrictions:

-Landlord must provide materials to existing and new tenants.


-Landlord shall not enter into a lease for a unit that has known bedbug infestation.


-Tenant shall not knowingly move materials into a unit with bedbugs.



Presence of bedbugs:

-Tenant must disclose knowledge to landlord of presence of bedbugs via electronically or written W/I 3 business days.


-Landlord or pest control unit has 7 business days to visually inspect bedbugs.


-Landlord has 7 business days from visual evidence to start treatment.


-Landlord shall give notice to tenants 3 days before initial treatment.


-This is at the landlord's expense.

Move Out Inspection:

-Tenants should be present (written notice from landlord).


-Landlord may apply the deposit against any accrued rent or damages to the premises when lease is over.


-An itemized list of damages must be given to tenant and any balance remaining must be returned to tenant W/I 14 business days.


-If deposit is not returned, tenant has right to recover up to twice amount wrongfully held.

Breach

Violation of any of the terms of the agreement W/O legal excuse.

Constructive Eviction

-Affects habitable conditions.


-Landlord has 10 days to from notice of noncompliance to fix problems.


-Lease is terminated not less than 10 days from notice.


-If the noncompliance is affecting health and safety, landlord has 5 days to fix problems and lease terminates not less than 5 days from notice.


-Tenant can repair property and be reimbursed up to $300 or half rent, whichever is greater.


-Terminates the lease W/O liability for any further rent.



Actual Eviction

-Landlord's remedy: tenant is forced to move out.


-5 days notice is needed.


-Distraint is not legal in Arizona.

Skip/Abandonment

Tenant moves W/O notice or payment of rent.

Reasons for termination:

-Destruction or condemnation of premises.


-Mutual agreement - lessee and lessor agree to rescind the lease.


-Expiration of the term of the lease.


-If tenant is convicted of a crime or is the victim of domestic violence.


-Death does not terminate a lease (falls to the heirs).

Security deposits

-Maximum deposit is one and a half month's rent.


-Cleaning and decorating deposits must be disclosed when nonrefundable.


-Security deposits are treated as trust money.

Security deposits as trust money:

-Can be interest bearing.


-Management agreement must identify interest goes.


-Broker may have $3000 of his own money in the trust account (comingling).


-Signers can be any employee/agent under the broker.

Non-disturbance Clause

Tenant cannot be disturbed if there is foreclosure on lessor.

Assignment of Rents Clause

Allows lender to collect rent if lessor defaults on loan.