PSI Oklahoma Real Estate Practice Test

What type of lease allows for an indefinite duration until terminated by one party?

1. Fixed-term lease

2. Periodic lease

3. Net lease

4. Ground lease

The correct answer is: Periodic lease

A periodic lease is characterized by an indefinite duration, continuing until either party decides to terminate it. This type of lease operates on a regular payment schedule, such as weekly, monthly, or yearly. The key feature is the renewability of the lease agreement, which automatically continues after each payment period unless a notice is given by one of the parties to terminate. This flexibility distinguishes periodic leases from fixed-term leases, which have a clearly defined start and end date. Net leases and ground leases have specific conditions and purposes but do not share the same indefinite nature as periodic leases. A net lease typically involves additional expenses beyond rent being covered by the tenant, and a ground lease usually pertains to leasing land for a long term, often with specific use conditions and not indefinitely renewable like a periodic lease.