CH 9 TRANSACTIONS USED Iin REAL ESTATE TRANSACTIONS part 2.pdf.docx

If a tenant is engaged in an illegal activity in the

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If a tenant is engaged in an illegal activity in the leased property, i.e., drugs, zoning violations, or other illegal acts, the violation of law causes a breach of contract. Consideration Legally, every contract must have acceptable consideration. Consideration is something of value given by one party to another party, as agreed by contract, in exchange for something of value. Consideration can be the exchange of a promise for a promise. For example, the landlord promises possession, and the tenant promises to pay rent. Typical Clauses in Residential Leases The statute of frauds in Texas calls for lease agreements to be in writing if the lease is for more than one year. However, landlords will generally call for all lease agreements to be in writing regardless of the duration. This is done to protect the landlord and the tenant if legal arbitration is necessary. Originally, lease agreements were created to protect the landlord only. Texas has since adopted the Landlord and Tenant Act (LTA) to ensure equality and fairness in the landlord-tenant relationship. The provisions of the Landlord and Tenant Act are found in title 8 of the Texas Property Code. In order for a lease to be enforceable, the lease agreement must be dated and include legal consideration or payment. As with any contract, tenants should carefully read the terms and provisions of a lease to make sure they understand the rights and restrictions of the lease before signing it. The lease terms attempt to spell out in advance the obligations of the landlord and the tenant in the face of certain issues. Clauses set up processes and procedures to be followed, and remedies the parties may use if a violation occurs. Understanding the terms related to tenancy and contracts is an important part of leasing property. A lease must clearly set forth all of its terms and conditions and explain the obligations and rights of all parties to the lease. When asking a tenant to sign a lease, the landlord should go over each clause and stipulation with the tenant to make sure the tenant understands what he or she is signing. Example: If the lease states that a late charge will be imposed five days after the due date for rent that is not paid, the tenant must understand that this lease ___________________________________________________________ Unit 9: Contracts Used In Real Estate Transactions II 333
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term will be enforced. Reviewing each major clause and asking the tenant to initial next to each one is a good method for proving that the terms of the contract have been discussed. The landlord must give the tenant a copy of the fully executed lease. A standard lease agreement, whether it is a residential or commercial lease, should include certain specific provisions. Leases can be customized by using terms and clauses that meet the owner’s objectives. However, in order to determine the best type of lease to use for specific types of properties, all lease agreements should be reviewed and approved by legal counsel.
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  • Fall '19
  • Leasehold estate

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