Under a Three-Year Lease That Has Expired, If the Tenant

question 19

Multiple Choice

Under a three-year lease that has expired, if the tenant remains in possession and the owner accepts rent payments, the lease:

• A) is renewed for three years
• B) is canceled
• C) becomes a month-to-month tenancy
• D) is renewed for one year

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Definitions:

Operating Leases

Provides for both financing and maintenance. Generally, the operating lease contract is written for a period considerably shorter than the expected life of the leased equipment and contains a cancellation clause; sometimes called a service lease.

Maintenance

Maintenance involves the actions taken to keep equipment, buildings, or software operating efficiently or to repair it to optimal functioning state.

Full Amortization

A loan repayment plan in which regular payments are made over the loan term, completely paying off both interest and principal by the end.

Penalties

Financial charges or other forms of punishment imposed on an entity for breaking rules, regulations, or agreements.