Texas Real Estate Contracts 4 th Edition © 2015 OnCourse Learning

Chapter 15: Leases © 2015 OnCourse Learning

Leasing Real Estate A lease is a written or oral agreement between a landlord and tenant that establishes or modifies the terms, conditions, rules, or other provisions regarding the use and occupancy of a dwelling. © 2015 OnCourse Learning

Leasehold Estates The lease arrangement between the landlord and tenant is a non-freehold estate, often referred to as a leasehold estate or tenancy. © 2015 OnCourse Learning

Tenancy for Years The tenancy for years is a tenancy with a fixed duration. © 2015 OnCourse Learning

Tenancy from Period to Period The tenancy from period to period is a tenancy without a fixed duration. Instead, the tenancy rolls over from some specific period to the next. © 2015 OnCourse Learning

Tenancy at Will The tenancy at will is a tenancy for an indefinite and uncertain length of time and might be tied to a specific event. © 2015 OnCourse Learning

Tenancy at Sufferance A tenancy at sufferance is created when a tenant remains in possession of the premises after termination of the lease. © 2015 OnCourse Learning

Lease Agreements The general rule of thumb concerning lease agreements is that the agreement between the parties controls the relationship. If the agreement does not speak to an issue between the parties, then the Texas Property Code will apply. © 2015 OnCourse Learning

Types of Leases In Texas, the type of lease agreement between the parties depends on the type of rent paid. © 2015 OnCourse Learning

Gross Lease The gross lease is a lease for a flat sum of rent. © 2015 OnCourse Learning

Ground Lease A ground lease is a lease for a flat sum of rent, but the rent is paid to the landlord for vacant land. © 2015 OnCourse Learning

Percentage Lease The percentage lease is a lease for a small base rent with an additional rent payment based on a percentage of gross profits on the premises. © 2015 OnCourse Learning

Net Lease The net lease requires the tenant to pay not only rent, but also the expenses of the property. © 2015 OnCourse Learning

Special Types of Lease Arrangements Lease Purchase Agreement Right of First Refusal Seller’s Temporary Residential Lease Buyer’s Temporary Residential Lease © 2015 OnCourse Learning

Lease Purchase Agreement With a lease purchase agreement, the landlord gives the tenant the right, up front, to purchase the property at a later date with specific terms. © 2015 OnCourse Learning

Right of First Refusal The right of first refusal gives the tenant the right to make the first offer to purchase the property. © 2015 OnCourse Learning

Seller’s Temporary Residential Lease (TREC 15-5) The Seller's Temporary Residential Lease is a promulgated addendum used when the seller is to remain in possession of the premises after closing. © 2015 OnCourse Learning

Buyer’s Temporary Residential Lease (TREC 16-5) The Buyer's Temporary Residential Lease is a promulgated addendum used when the buyer is to take possession of the premises prior to the closing date. © 2015 OnCourse Learning

Discharge or Termination of Leases A lease can terminate by its own terms. The tenant may also surrender the property thereby terminating the lease. The lease can be terminated by mutual agreement of the parties. © 2015 OnCourse Learning