Articles Posted in Rental Properties

For rent signAuthor: Staff

Real estate investment can take many forms and offers many ways to obtain a return on one’s investment. Some investors purchase real property in order to make improvements and sell it, while others may purchase property with the goal of leasing it for rental income. Leases on real property can be broadly divided into two categories:  residential and commercial. While residential leases are subject to a wide range of legal restrictions aimed at protecting tenants, commercial leases allow far greater flexibility. Both types of leases involve their share of risks, from the hassle of collecting unpaid rent to the possibility of serious damage to the property. Commercial real estate investors in San Diego should be aware of the opportunities—and liabilities—that commercial leases have to offer.

How Are Commercial Leases Different from Residential Leases?

house keysAuthor: Staff

Investing in real estate involves far more than just buying and selling land. A real estate investment can consist of a complicated web of assets, obligations, and contractual relationships. This latter category is crucially important for California real estate investors to understand, since the duties created by contracts can have far-reaching effects. Leases are a type of contract in which the owner of real estate (the “lessor”) allows someone (the “lessee”) to use that real estate as their home or for business purposes. A lessor has multiple duties under a typical lease agreement, and California law imposes numerous additional obligations on lessors in residential settings.

What Is a Lease?

A lease is a contract between a lessor and a lessee. According to the statute of frauds, a lease agreement must be in writing. It is possible—but generally not advisable—to have an enforceable oral agreement for a month-to-month lease.

The lessor provides the exclusive use of the leased property, and the lessee pays rent. If either party fails to fulfill their obligations, they may be liable to the other party for breach of the lease. California law makes a distinction between residential and commercial leases. It generally imposes more restrictions on lessors in residential lease agreements.
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