Study guide

Leasing & Property Management — Key Facts

This is the smallest national topic, but its questions are highly repeatable: the four leasehold estates, the lease payment structures (gross, net, percentage), and the property manager's fiduciary duty to the owner — not the tenants. Watch for constructive eviction scenarios, where a landlord's neglect forces a tenant out. A short unit, a quick win: learn the vocabulary and these become gimme questions on exam day.

Leasehold Estates

Estate for years: definite start/end date, terminates automatically, no notice needed.
Periodic tenancy: renews automatically (e.g., month-to-month) until notice is given.
Tenancy at will: no fixed term, terminable by either party. Tenancy at sufferance: tenant overstays without consent.

Lease Types

Gross lease: landlord pays operating expenses. Net/triple net: tenant pays some or all expenses on top of rent.
Percentage lease: base rent + % of gross sales — common in retail.

Property Management

Property manager is a general agent owing fiduciary duty to the OWNER, not the tenants.
Constructive eviction: landlord's neglect is so severe it forces the tenant out.
Assignment transfers the tenant's ENTIRE remaining term; a sublease transfers only part — the original tenant stays liable in both unless expressly released.

Key vocabulary: Leasing & Property Management glossary (18 terms)

Practice Leasing & Property Management

Every Freehold question shows why the right answer is right — and cites its source.

In a gross lease, who typically pays the property taxes, insurance, and maintenance?

The tenant pays all operating expenses
Expenses are split evenly between the parties
The property manager pays from the security deposit
The landlord pays the operating expenses

Show answer & explanation

The landlord pays the operating expenses — Under a gross lease the tenant pays a fixed rent and the landlord covers operating expenses like taxes, insurance, and maintenance. Residential apartment leases are commonly structured this way.

Source: PSI National Real Estate Exam Content Outline §8 Leasing & Property Management

Under a triple net (NNN) lease, the tenant pays base rent plus:

Property taxes, insurance, and maintenance
Only utilities and janitorial costs
A percentage of gross sales
The landlord's mortgage payment

Show answer & explanation

Property taxes, insurance, and maintenance — A triple net lease passes the three major operating costs — property taxes, insurance, and maintenance — through to the tenant on top of base rent, common in commercial single-tenant properties.

Source: PSI National Real Estate Exam Content Outline §8 Leasing & Property Management

A lease that runs from June 1 to August 31 with a definite end date creates which leasehold estate?

A periodic month-to-month tenancy
An estate for years
A tenancy at will
A tenancy at sufferance

Show answer & explanation

An estate for years — An estate for years is a leasehold with a definite beginning and ending date, regardless of its length. It terminates automatically at the end date without either party giving notice.

Source: PSI National Real Estate Exam Content Outline §8 Leasing & Property Management

A percentage lease, in which rent is based partly on gross sales, is most commonly used for:

Single-family rental homes
Industrial warehouses
Retail stores in shopping centers
Agricultural land

Show answer & explanation

Retail stores in shopping centers — Percentage leases combine a base rent with a percentage of the tenant's gross sales, aligning the landlord's income with retail performance. They are standard in shopping centers and malls.

Source: PSI National Real Estate Exam Content Outline §8 Leasing & Property Management

A property manager's primary fiduciary responsibility is to:

The tenants who occupy the property
The maintenance vendors under contract
The local housing authority
The property owner who hired them

Show answer & explanation

The property owner who hired them — The property manager is a general agent of the owner and owes fiduciary duties to the owner, including maximizing income and preserving the property's value, while still treating tenants fairly and lawfully.

Source: PSI National Real Estate Exam Content Outline §8 Leasing & Property Management

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