Definition
Premises generally refer to the land, buildings, part of a building, and any associated structures or improvements on that land used for various purposes. In legal terms, premises are the property subject to a lease or conveyance. It encompasses the physical boundaries of a property, whether it’s commercial, residential, or industrial.
Examples
Example 1:
Selling Property: Carter deeds the premises to Dawson, transferring ownership of the land and all structures on it.
Example 2:
Leasing Property: Dawson leases the premises to Enwright, allowing Enwright to use the property for a specified period under certain conditions.
Example 3:
Commercial Use: A company leases premises within a business park to operate its headquarters, including office space and parking facilities.
Example 4:
Residential Use: A family purchases a new home. The premises include the house, driveway, garden, and any other structures like a shed or garage.
Frequently Asked Questions (FAQs)
1. What is included in the term ‘premises’?
The term includes land, buildings, and any associated structures or improvements. It encompasses everything within the property boundaries.
2. Are premises limited to buildings?
No, premises can also refer to land, parking areas, gardens, and other outdoor spaces that are part of the property.
3. How is the term ‘premises’ used in a lease agreement?
In a lease agreement, ‘premises’ defines the exact area that the tenant is permitted to use and lease terms and conditions applicable to that space.
4. Does ‘premises’ imply ownership?
The term itself does not imply ownership. It can refer to property that is owned, leased, or otherwise occupied.
5. Can ‘premises’ refer to a part of a building?
Yes, it can refer to any part of a building such as a suite, floor, or designated space within larger structures.
6. Is ‘premises’ used in both residential and commercial real estate?
Yes, the term is applicable in both realms, describing the entirety of property under consideration.
7. What’s the difference between ‘premises’ and ‘real estate’?
‘Real estate’ typically refers to the broader market and concepts, while ‘premises’ is a specific legal term referring to property subject to leasing or conveyance.
1. Conveyance
Refers to the act of transferring property from one party to another, typically through a deed, lease, or other legal document.
2. Tenement
An archaic legal term for any kind of permanent property, particularly buildings and land.
3. Estate
The interest, right, or equity one has in real property.
4. Lease
A contract by which one party conveys land, property, services, etc., to another for a specified time, usually in return for periodic payment.
5. Deed
A legal document that is signed and delivered, especially one regarding the ownership of property or legal rights.
Online Resources
- Investopedia: Premises
- Nolo: Legal Encyclopedia
- Legal Dictionary: Premises
References
- Black’s Law Dictionary
- The Law of Real Estate by Herbert A. Hollander
- Real Estate Law (Aspen Casebook Series) by Robert Aalberts
Suggested Books for Further Studies
- “Understanding Real Estate Principles: A Beginner’s Guide” by Martha Walters
- “Real Estate Law” by Marianne M. Jennings
- “The Encyclopedia of Real Estate Forms & Agreements” by Atlantic Publishing
Real Estate Basics: Premises Fundamentals Quiz
### Which of the following best describes the term 'premises' in real estate?
- [ ] Only the building structures on a property.
- [ ] The geographical region where a property is located.
- [x] Land, buildings, and any associated structures or improvements.
- [ ] The legal terms outlined in a lease or deed.
> **Explanation:** 'Premises' refers to the land, buildings, and any associated structures or improvements within the property boundaries.
### Can a parking area be included in the 'premises' definition?
- [x] Yes, it can be included as part of the premises.
- [ ] No, it cannot be included.
- [ ] Only if explicitly stated in the deed.
- [ ] It depends on the type of property.
> **Explanation:** Premises include all associated structures or improvements, which can encompass parking areas.
### What does a deed usually transfer?
- [x] Ownership of the premises from one party to another.
- [ ] Temporary use of the premises.
- [ ] Right to occupy the premises without ownership.
- [ ] Easement rights across adjoining properties.
> **Explanation:** A deed typically transfers ownership of the premises from one party to another, detailing what land and structures are included.
### In a lease agreement, what is 'premises' referring to?
- [ ] The total value of the property.
- [x] The exact area that the tenant is permitted to use.
- [ ] The landlord's obligations.
- [ ] The future value predictions of the property.
> **Explanation:** In a lease agreement, 'premises' defines the exact area the tenant is permitted to use under the lease.
### Can a single floor in a building be considered premises?
- [x] Yes, it can be considered premises.
- [ ] No, only the whole building qualifies.
- [ ] Only if it's an office space.
- [ ] It must be an industrial space.
> **Explanation:** A single floor or any designated part of a building can be categorized as premises based on the specific lease or conveyance agreement.
### What document would most likely outline the boundaries and legal terms of premises transfer?
- [ ] Insurance Policy
- [x] Deed
- [ ] Mortgage
- [ ] Appraisal report
> **Explanation:** A deed outlines the boundaries, legal terms, and conditions under which premises transfer from one party to another.
### How does the term 'premises' differ in a residential and commercial context?
- [x] It does not differ; it means land and buildings in both contexts.
- [ ] It includes various improvements only in residential contexts.
- [ ] It refers more to land in commercial and to buildings in residential contexts.
- [ ] It is not used in residential real estate.
> **Explanation:** In both residential and commercial real estate, 'premises' refers to land, buildings, and any associated structures or improvements.
### Who usually defines what constitutes the premises in a lease agreement?
- [ ] The local county clerk
- [x] The landlord or property owner
- [ ] The municipality
- [ ] The federal government
> **Explanation:** The landlord or property owner typically defines what constitutes the premises in a lease agreement.
### Does the legal term "premises" imply temporary or permanent use?
- [ ] Always temporary use.
- [ ] Always permanent ownership.
- [x] It can imply either temporary use (lease) or permanent ownership (deed).
- [ ] It only refers to commercial properties.
> **Explanation:** The term can imply either temporary use, as in a lease, or permanent ownership, as detailed in a deed or similar document.
### Which document would you review to determine the specifics of the 'premises' in a commercial lease?
- [ ] Tenant's credit report
- [ ] Construction plans
- [x] Lease agreement
- [ ] Local zoning ordinance
> **Explanation:** You would review the lease agreement to determine the specifics of the 'premises' in a commercial lease.
