Term
| true or false:A voidable contract differs from a void contract in that the void contract does not require an act of disaffirmation to make it unenforceable. |
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Definition
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Term
| true or false:In many states (including Oklahoma), a person must be at least 18 years old to enter into a binding contract. If a person under 18 is legally married, he or she is considered an adult for the purposes of purchasing a residence. |
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Definition
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Term
| true or false:If the contracting party is representing another person or business entity, the representative must have the legal authority to contract. If representing another person, the party must have a bona fide power of attorney. |
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Definition
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Term
| what is mutual agreement also known as? |
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Definition
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Term
| true or false: The contract is not valid or enforceable if just one party provides consideration. |
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Definition
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Term
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Definition
| In effect, consideration is the price one party must pay to obtain performance from the other party. |
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Term
| what is the statute of frauds? |
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Definition
| The Statute of Frauds requires that certain contracts must be in writing to be enforceable. Real estate contracts that transfer an interest in real property fall in this category, with the exception of a lease with a term of one year. |
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Term
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Definition
| A real estate contract that is not a personal contract for services can be assigned to another party unless the terms of the agreement specifically prohibit assignment. Sales contracts are assignable because they involve the purchase of real property rather than a personal service. |
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Term
| what is reformation of a contract? |
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Definition
| Sometimes a contract does not accurately reflect the intentions of the parties because of some mechanical or clerical error in the document. When this happens a legal action called a reformation is necessary to correct or modify the contract. |
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Term
| Purchase and Sale Agreement |
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Definition
| Also known as a contract of sale, the purchase and sale agreement is the contract in which the buyers agree to purchase a property for a certain price and the sellers agree to convey title to the buyers using a deed or an assignment of lease (for leasehold property). This agreement binds the parties to the purchase during the time it takes to bring the transaction to close. In addition, it usually gives initial directions to the closing agent to process the mechanics of the transaction. |
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Term
| what is an installment sales contract? |
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Definition
| An installment sales contract is also called a contract for deed, a land contract, a conditional sales contract, and an agreement for deed. It is a bilateral agreement between a seller, the vendor, and a buyer, the vendee, in which the vendor defers receipt of some or the entire purchase price of a property over a specified period of time. |
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Term
| in regards to an installment sales contract, who retains legal title? |
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Definition
| vendor retains legal title and the vendee acquires equitable title. The vendee takes possession of the property, makes stipulated payments of principal and interest to the vendor, and otherwise fulfills obligations as the contract requires. At the end of the period, the buyer pays the vendor the full purchase price and the vendor deeds legal title to the vendee. |
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Term
| what are the benefits to the buyer in an installment sales contract? |
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Definition
| Like an option, a contract for deed offers a means for a marginally qualified buyer to acquire property. In essence, the seller acts as lender, allowing the buyer to take possession and pay off the purchase price over time. A buyer may thus avoid conventional down payment and income requirements required by institutional lenders. During the contract period, the buyer can work to raise the necessary cash to complete the purchase or to qualify for a conventional mortgage. |
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Term
| in regards to an installment contract, what are the benefits to the seller? |
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Definition
| A contract for deed serves two primary purposes for a seller. First, it facilitates a sale that might otherwise be impossible. Second, it may give the seller certain tax benefits. Since the seller is not liable for capital gains tax until the purchase price is received, the installment sale lowers the seller's tax liability in the year of the sale. |
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Term
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Definition
An option to buy is an enforceable contract in which a potential seller, the optionor, grants a potential buyer, the optionee, the right to purchase a property before a stated time for a stated price and terms. In exchange for the right of option, the optionee pays the optionor valuable consideration.
An option to buy places the optionee under no obligation to purchase the property. However, the seller must perform under the terms of the contract if the buyer exercises the option. An option is thus a unilateral agreement. Exercise of the option creates a bilateral sale contract where both parties are bound to perform. An unused option terminates at the expiration date. |
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Term
| what is a lease with option to buy? |
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Definition
| A renter with a lease with option to buy can accumulate down payment funds while paying rent to the landlord. For example, an owner may lease a condominium to a tenant with an option to buy. If the tenant takes the option, the landlord agrees to apply $100 of the monthly rent paid prior to the option date toward the purchase price. The tenant pays the landlord the nominal sum of $200 for the option. |
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Term
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Definition
| A right of first refusal is different from an option. It is the right of a person to have the first opportunity to purchase or lease a property. Unlike an option, the holder of the right has no right to purchase until the seller actually offers the property for sale or has an offer on the property from a third party. At that point in time, the holder of the first right of refusal can choose to match the offer. If the holder declines, the seller can offer the property to a third party at the offer price or at a higher price. |
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Term
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Definition
| A lease or rental agreement is a contract that transfers the right to exclusive possession and use of a property for a definite period of time. In order for the lease to be valid, the landlord must grant possession to the tenant, but retain the right to take possession back after the term of the lease has expired. |
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Term
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Definition
| There are times when purchase and sale agreements terminate for one reason or another. Both buyers and sellers could mutually agree to terminate the contract. Contingencies can fail through no fault of the buyers, leading to the termination of the contract. Whatever the reason, when a purchase contract terminates, the parties can sign a rescission contract in which they agree that they are rescinding the contract and they are releasing one another and all others involved in the sale from any present or future liability. |
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Term
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Definition
| If the sellers choose to "accept" the offer by making any change to the buyers' original offer, it is not truly an acceptance. In actuality, the sellers' answer to the buyers is a counteroffer. When a counteroffer is made, the original offer terminates and the counteroffer in effect becomes a new offer. |
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Term
| what is a rider or addenda to a contract? |
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Definition
| Most purchase and sale agreements are preprinted forms that the licensees fill in and the parties sign. Issues that are not covered in the purchase and sale agreement itself are usually dealt with using preprinted riders or addenda that can be attached to the sales contract. |
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Term
| what is a contingency rider? |
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Definition
| A typical rider in a real estate contract is a contingency rider for an inspection or one that deals with the buyers' need to sell their current residence. |
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Term
| Why is it important for a buyer to fill out a purchase and sale agreement in the first place? |
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Definition
price is only one of the terms the sellers need to evaluate. In order to determine if the offer is a good one, the sellers must also evaluate issues such as earnest money deposit, closing date, financing and any special requests or contingencies that may also be attached.
Additionally, if the sellers like the offer and sign it, it immediately becomes a contract designed to hold both parties to the agreement until closing. Once the parties have entered into this agreement – the offer is made and the offer is accepted – it becomes "enforceable," meaning that the law will take steps to enforce it if necessary. |
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Term
| How does a contract for deed differ from a contract of sale? |
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Definition
| With a contract for deed, the purchase price is deferred and paid in installments to the sellers. The buyers take possession and get equitable title, but sellers retain legal title until the buyers complete their payments, at which time the sellers deliver the title by way of deed. With a contract of sale, the buyers pay for the property and take title at closing. |
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Term
| What happens when a counteroffer is made? |
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Definition
| The original offer terminates and the counteroffer in effect becomes a new offer. |
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Term
| What happens when both buyers and sellers sign the purchase and sale agreement? |
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Definition
| It immediately becomes a legal contract designed to hold both parties to the agreement until closing. |
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Term
| purchase and sale agreement must also do the following: |
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Definition
Identify the parties to the contract.
Describe the property to be transferred.
Give the offering price.
State the method of payment.
Describe how utilities will be paid.
Provide for settlement of taxes, insurance and any liens.
State the type of deed and condition of the title.
List any liens or encumbrances that the buyer will assume.
Outline and explain any contingencies.
Set a time for delivery of title and possession |
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Term
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Definition
| As you well know, many transactions have more than one buyer and/or more than one seller. In order to avoid any future, potential problems with the transaction, everyone who has ownership interest in the property must sign the contract. |
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Term
| Property Owned by Married Couples |
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Definition
| In states known as community-property states, whenever property that is held by spouses is sold, both the husband and wife must be a party to the contract. So, in those states, if the buyer or seller is married, the signatures of both spouses should be on the contract. |
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Term
| Property Owned by Joint Tenants or Tenants in Common |
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Definition
| When property is held by joint tenants or tenants in common, all owners must sign the purchase and sale agreement if the entire property is being sold. However, nothing could stand in the way of a single joint owner or tenant in common selling his or her own interest in the property. He or she would not need the consent of the other owners. |
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Term
| Property Owned by Businesses |
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Definition
When one of the parties to a real estate transaction is a partnership, the licensee should enter the names of all the general partners and their spouses into the contract. The name of the partnership should also be in the contract. In the case of a corporation, the name of the corporation should be identified in the contract.
The contract should also show the partnership's or corporation's address and the state in which the partnership is organized or the corporation is incorporated. |
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Term
| Property Belonging to an Estate or Trust |
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Definition
The executor of the estate must be the one to sign the purchase and sale agreement and other documents when the property being sold is part of an estate.
If the property being sold is part of a trust, the trustee must be the one to sign all the appropriate documents. |
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Term
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Definition
Even though most contracts have a line on which to write the street address for the property, this type of identification is rarely sufficient. Many states require the attachment of a legal description of the property. The legal description should be descriptive enough so that the particular parcel of land can be both located and identified, for example, a reference to a recorded plat map or deed.
If the legal description of the property is very complicated, it's best to get a photocopy of the description from a title company or a photocopy of the seller's deed. |
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Term
| Price and Method of Payment |
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Definition
Of course, the offering price stated in the contract is very important to the buyers and the sellers. But HOW the price will be handled is equally important. Unless the buyers are doing a full cash purchase with no financing from other sources, you can almost be certain that the purchase will be contingent on financing. That means if the buyers cannot obtain the financing they need to make the purchase, the agreement will terminate. Financing contingencies are usually described in a separate addendum to the purchase and sale agreement.
Sometimes sellers agree to finance all or part of the sale. When something like this happens, the sellers must specify the terms of the financing, such as the interest rate and monthly payment amount. This is also typically outlined in a separate addendum called a payment terms addendum. |
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Term
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Definition
The purchase and sale agreement will have a clause that states the sellers will provide a marketable title and a title insurance policy with standard coverage. The sellers will pay off any liens at or before closing, unless the buyers have agreed to assume or take title subject to an existing lien.
It's important to note however, that if the sellers have a pending legal action, such as a divorce, a bankruptcy or a foreclosure, they may not be able to convey a clear title. Any pending legal actions MUST be disclosed to the buyers. If the buyers have questions about how a legal action could affect the sale, they need to consult with a legal professional. |
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Term
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Definition
| The purchase and sale agreement will state which of the parties is responsible for paying which of the fees. Typically, the escrow fees are split between buyers and sellers. The agreement states which party will pay the fees that pertain to the buyers' loan and will set out how other expenses are divided up. Expenses such as taxes, insurance and homeowner association fees are usually prorated as of the closing date. |
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Term
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Definition
In most transactions, the possession transfers on the day of closing. However, sometimes the buyers will want to take possession earlier than closing. Other times the sellers want to remain for a few days after closing – especially if the sellers are moving to a new home and they could not manage to get the closing on their new home in sync.
If either of these cases happens, the parties should enter into a rental agreement to define the terms of the interim period, such as occupancy dates and rental rates.
Transferring possession on a date other than the closing date could have a serious impact on the parties. For example, if the buyers take possession before closing and the sale falls through for some reason, the sellers could be in a real bind – especially if the buyers-turned-renters refuse to leave. In general, it's not a wise idea to transfer possession to the buyers before the closing takes place. |
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Term
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Definition
A purchase and sale agreement will address what happens in the case of a default. It will state what remedies are available to each of the parties. It also usually addresses how the earnest money deposit will be handled.
Often when a default occurs, it is decided that the sellers will keep the earnest money deposit as damages. Some states put a cap on the amount of liquidated damages, so it's important for you to find out if your state has such a cap, and if so, what that amount is. |
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Term
| Name four items that must be present in a purchase and sale agreement for it to be legal. |
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Definition
Identify the parties to the contract.
Describe the property to be transferred.
Give the offering price.
Outline and explain any contingencies. |
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Term
| What is important to note about the street address of a property when writing a purchase and sale agreement? |
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Definition
| A street address is rarely enough. A complete legal description should be attached to the agreement. |
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Term
| What is important to note about the street address of a property when writing a purchase and sale agreement? |
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Definition
| A street address is rarely enough. A complete legal description should be attached to the agreement. |
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Term
| What does "time is of the essence" mean? |
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Definition
| This phrase emphasizes the requirement that events related to the contract must be performed on time. |
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Term
| What is a right of first refusal? |
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Definition
| The right of a person to have the first opportunity to purchase or lease a property |
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Term
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Definition
| A lease is both an instrument of conveyance and a contract between principal parties to uphold certain covenants and obligations. As a conveyance, a lease conveys an interest, called the leasehold estate, but does not convey legal title to the property. For this reason, a leasehold is also called a less-than-freehold estate. |
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Term
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Definition
| are distinguished from freeholds by their temporary nature. Every leasehold has a limited duration, whether the term is 99 years or not stated at all. While the lease conveys exclusive use, it may also restrict such use to conform to the landlord's desires. For example, an apartment lease may prohibit a tenant from having pets in the premises |
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Term
| true or false: Recording of a leasehold conveyance is not a requirement for validity, although it is usually good procedure to do so. |
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Definition
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Term
| true or false: In a lease arrangement, the owner is the landlord, or lessor, and the renter is the tenant, or lessee. |
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Definition
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Term
| what are the four basic types of leasehold estates? |
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Definition
Estate for Years
Estate from Period to Period (Periodic estate)
Estate at Will
Estate at Sufferance |
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Term
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Definition
An estate for years is one that continues for a definite fixed period of time. The lease can be for any specified length of time measured in days, weeks or months.
Has a definite beginning and ending date.
Not necessary to give notice to the landlord to terminate.
NO automatic renewal. When this type of lease is over, it's over.
Commonly used with commercial leases and some apartment leases.
Investors and lenders will most likely encounter this type of lease. |
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Term
| Estate from Period to Period |
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Definition
This is more commonly referred to as a periodic tenancy, periodic lease or month-to-month lease. The lease continues from period to period, which can be from year to year, month to month, or week to week. Month to month is the most common periodic tenancy.
Requires proper notice to terminate - 30 days, 60 days or whatever is agreed to in the lease.
No definite ending date. This type of lease renews itself for whatever period of time that was called for in the original lease or whatever is agreed upon in the actual lease.
Most apartment leases are estates from period to period if the tenant is required to give notice to terminate. If the current tenants will remain after the property transfers, the grantee (person who receives the property) should agree to take title subject to existing leases. |
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Term
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Definition
| This estate has no time limit. The possession is given with permission but there is no agreement about the rent. This estate can be terminated by either party at any time, with proper notice. |
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Term
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Definition
| This estate is created when a tenant takes legal possession of the property but then remains on the property without the owner's consent after the lease terminates. A tenant who doesn't leave when the lease expires is called a holdover tenant. When this happens, the owner can evict the tenant through a court action. If the owner chooses to allow the tenant to stay, a month-to-month tenancy is created. |
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Term
true or false: A lease conveys a leasehold interest or estate that grants the tenant the following rights during the lease term: Exclusive possession and occupancy
Exclusive use
Quiet enjoyment
Profits from use |
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Definition
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Term
| The lease defines the tenant's obligations, which principally are to: |
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Definition
Pay the rent on time
Maintain the property's condition
Comply with the rules and regulations of the building |
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Term
| In conveying the leasehold estate, the landlord acquires a leased fee estate, which entails the rights to: |
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Definition
Receive rent
Re-possess the property following the lease term
Monitor the tenant's obligations to maintain the premises |
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Term
| The lease defines the landlord's obligations, which principally are to: |
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Definition
Provide the necessary building support and services
Maintain the condition of the property |
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Term
| Conveyance of Leased Property |
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Definition
| The landlord may sell, assign, or mortgage the leased fee interest. However, transferring and encumbering the leased property do not extinguish the obligations and covenants of a lease. Buyers and creditors, therefore, must take their respective interests subject to the terms of the lease. |
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Term
| The covenants (agreements or promises) in the lease are very important. The following eight covenants are essential in most leases. |
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Definition
Capacity to contract
Demising clause
Description of the premises
Clear statement of term
Specification of rent and how it is to be paid
In writing
Signatures
Delivery |
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Term
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Definition
| This clause talks about the landlord leases the property and the tenant takes possession of the property. |
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Term
| Description of the Premises |
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Definition
| The lease must identify the property. This can be done by street address or any description that makes the property identifiable to the parties. It does not have to be a legal description, although that is the best format for a long-term lease. |
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Term
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Definition
| The term is how long the lease will last. The lease must indicate the length. Usually the lease is written in annual terms; however, it has no limit. It's important for both parties to understand when the lease will expire. The parties can shorten the length of the lease by mutual agreement. |
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Term
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Definition
| The term is how long the lease will last. The lease must indicate the length. Usually the lease is written in annual terms; however, it has no limit. It's important for both parties to understand when the lease will expire. The parties can shorten the length of the lease by mutual agreement. |
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Term
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Definition
| A rent clause stipulates the time, place, manner and amount of rent payment. It defines any grace period that is allowed, and states the penalties for delinquency. The lease agreement typically specifies payment in advance on a month-to-month basis. |
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Term
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Definition
| Any lease for more than one year should be in writing. Oral leases for more than one year cannot be legally enforced in court. |
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Term
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Definition
| The landlord must sign the lease to convey the leasehold interest. A tenant is not required to sign the lease, but it would be best to do so in order to enforce the terms of the lease. If the lease will be recorded, it must be signed by both parties |
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Term
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Definition
| The landlord must deliver the lease to the tenant and each party should have duplicate originals. |
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Term
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Definition
| An option to renew is a lease provision that gives the tenant the right to extend the lease for an additional period of time and sets forth the terms for the renewed lease. |
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Term
| Which type of leasehold estate is commonly referred to as a periodic tenancy? |
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Definition
| Estate from period to period |
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Term
| What are a tenant's primary obligations when leasing a property? |
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Definition
Pay the rent on time
Maintain the property's condition
Comply with the rules and regulations of the building |
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Term
| List three covenants that are essential in a lease. |
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Definition
Demising clause
Description of the premises
Clear statement of term |
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Term
| How can a landlord restrict the use of a residential property? |
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Definition
| By including such restrictions or limitations in the lease. If no such limitations are written into the lease, the tenant may use the property for any lawful purpose, providing the tenant does not violate any deed restrictions. |
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Term
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Definition
A security deposit is money that a tenant deposits with the owner of the apartment for the repair of any damages to the apartment for which the tenant is responsible. This deposit is often equivalent to one-month's rent.
At the end of the lease, if the tenant honored the terms and conditions of the lease and left the apartment in the same condition as it was when rented, except for normal wear, the owner must return the full security deposit. If damage was done, the owner may apply part or all of the security deposit to the cost of repair. |
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Term
| Possession and Habitability |
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Definition
| It is the landlord's responsibility to maintain the units and make any needed repairs to common areas, such as stairs, hallways and elevators. The tenants are not required to make repairs, but must return the unit in the same condition it was in when he or she first moved in, except for normal wear and tear. |
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Term
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Definition
If the landlord gives permission, a tenant may make improvements to the property. However, when this happens the improvements generally become fixtures and therefore become the property of the landlord.
A tenant may get permission to install trade fixtures, which by definition can be removed by the tenant prior to the expiration of the lease – as long as the tenant restores the property to its original condition. |
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Term
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Definition
| Subletting (subleasing) is the transfer by a tenant, the sublessor, of a portion of the leasehold interest to another party, the sublessee, through the execution of a sublease. The sublease spells out all of the rights and obligations of both parties, including the payment of rent to the sublessor. The original tenant remains primarily liable for the original lease with the landlord. The subtenant is liable only to the original tenant. |
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Term
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Definition
An assignment of the lease is a transfer of the entire leasehold interest by a tenant, the assignor, to a third party, the assignee. There is no second lease, and the assignor retains no residual rights of occupancy or other leasehold rights unless expressly stated in the assignment agreement. The assignee becomes primarily liable for the lease and rent, and the original tenant remains secondarily liable. The assignee pays rent directly to the landlord.
All leases clarify the rights and restrictions of the tenant regarding subleasing and assigning the leasehold interest. Generally, the landlord cannot prohibit either act, but the tenant must first obtain the landlord's written approval. |
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Term
| A lease may terminate for any of the following causes. |
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Definition
Term expiration - In a tenancy for years, the lease automatically terminates at the end of the lease term.
Notice - Proper notice by either party may terminate a periodic leasehold, or a tenancy at will.
Voluntary agreement - Both parties can agree to terminate a lease at any time.
Property destruction - Destruction of the property is grounds for terminating lease obligations.
Condemnation - A taking by eminent domain proceedings generally terminates a lease.
Foreclosure - A foreclosure extinguishes all prior interests in a property, including a leasehold |
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Term
| A lease may also terminate due to a breach of contract or default. |
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Definition
Tenant default occurs most commonly from failure to pay rent or maintain the premises. The landlord may not physically remove a tenant from the unit, lock a tenant out, turn off utilities or remove an apartment door without a court order. In some states, if a landlord uses an illegal method to remove a tenant, that landlord is subject to criminal and civil penalties. In addition, the tenant can move back in.
If a tenant is in default, the landlord may file a suit for eviction. If successful in this suit, the landlord can repossess the property and evict the tenant. This is known as actual eviction. |
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Term
| A lease may also be terminated through landlord default. When a landlord defaults on the terms of the lease, tenants may sue for damages. In an instance where the landlord's negligence or disruptive action has rendered the property uninhabitable, a tenant may leave the property and declare that the lease is cancelled by default. This action, called constructive eviction, can invalidate the tenant's lease obligations if the claim succeeds in court. In order to obtain a constructive eviction judgment, the tenant must move out of the apartment. |
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Definition
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Term
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Definition
If a tenant abandons a leased property and demonstrates no intention of fulfilling the obligations of the lease, the landlord may re-take possession and pursue legal recourses for default. In such a case, the tenant remains liable for payment of rent. The landlord also has the option of terminating the lease, which releases the tenant from responsibility for rent. However, the landlord may be able to sue for damages and at the same time re-let the property.
It is important to note that leaving leased premises does not in itself constitute abandonment, and certainly not if the tenant continues to abide by the lease obligations. |
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Term
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Definition
or full service lease, requires the landlord to pay the property's operating expenses, including utilities, repairs, and maintenance, while the tenant pays only rent. Rent levels under a gross lease are higher than under a net lease, since the landlord recoups expense outlays in the form of added rent.
Gross leases are common for office and industrial properties. Residential leases are usually gross leases with the exception that the tenants often pay utilities expenses. |
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Term
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Definition
In a net lease, the tenant pays not only the rent for occupancy, but also pays maintenance and operating expenses such as taxes, insurance, utilities and repairs. Depending on how much additional responsibility the tenant assumes, the lease can be a
Net lease – The tenant pays maintenance and taxes only.
Net-net lease – The tenant pays some, but not all, of the maintenance, insurance and taxes.
Net-net-net lease (Triple net lease) – The tenant agrees to pay all taxes, insurance, maintenance and repairs.
Commercial or industrial leases and long-term leases are typically net leases. |
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Term
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Definition
| In a graduated lease, the rent payments start at a fixed amount but increase as the lease term matures. The increase could be based on the increased value of the property as determined by periodic appraisals. |
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Term
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Definition
A ground, or land lease, concerns the land portion of a real property. The owner grants the tenant a leasehold interest in the land only, in exchange for rent.
Ground leases are primarily used in three circumstances:
An owner wishes to lease raw land to an agricultural or mining interest
Unimproved property is to be developed and either the owner wants to retain ownership of the land, or the developer or future users of the property do not want to own the land
The owner of an improved property wishes to sell an interest in the improvements while retaining ownership of the underlying land
In the last two instances, a ground lease offers owners, developers, and users various financing, appreciation, and tax advantages. Land leases executed for the purpose of development or to segregate ownership of land from ownership of improvements are inherently long-term leases, often ranging from thirty to fifty years. |
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Term
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Definition
A percentage lease is a lease whose rental is based on a percentage of the monthly or annual gross sales made on the site. There is usually a minimum rent required in addition to the percentage of the gross.
A percentage lease may also include a recapture clause, which indicates that if the tenant does not obtain the desired gross sales, the owner has the right to terminate the lease. This type of lease is common with large retail stores, particularly in shopping centers. |
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Term
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Definition
| A proprietary lease conveys a leasehold interest to an owner of a cooperative. The proprietary lease does not stipulate rent, as the rent is equal to the owner's share of the periodic expenses of the entire cooperative. The term of the lease is likewise unspecified, as it coincides with the ownership period of the cooperative tenant: when an interest is sold, the proprietary lease for the seller's unit is assigned to the new buyer. |
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Term
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Definition
| An index lease provides for the adjustment of rent according to changes in a price index. The most commonly used indexes are the consumer price index and the wholesale price index. |
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Term
| Why do landlords collect security deposits? |
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Definition
| For the repair of any damages to the apartment for which the tenant is responsible |
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Term
| What is the difference between a sublease and an assignment? |
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Definition
A sublease is the transfer by a tenant of a portion of the leasehold interest to another party.
An assignment of the lease is a transfer of the entire leasehold interest by a tenant to a third party. |
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Term
| List three commons causes of a lease termination. |
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Definition
Term expiration
Voluntary agreement
Property destruction |
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Term
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Definition
| The tenant pays a fixed rent and the owner pays the taxes, insurance and other normal ownership expenses. |
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