Question: TRUE OR FALSE True 1. Depending on the term memorialized and the discernable intent of the parties, the Letter of Intent may be binding. False
TRUE OR FALSE
True 1. Depending on the term memorialized and the discernable intent of the parties, the Letter of Intent may be binding.
False 2. Base rent includes amounts associated with annual increases in Operating Expenses.
_____ 3. Commercial leases may involve personal guarantees, letters of credit, and other negotiated documents, but the lease is paramount.
True 4. Landlord would like rent to be based on the rentable or gross area rather than useable space.
False 5. During the Term of the lease, Landlord has the right to exclusive possession of the property.
True 6. Landlord cannot gain access to Premises without the Tenants permission, unless the lease provides otherwise.
True 7. The expansion right negotiated by Tenant must always be included in the initial lease agreement to be enforceable.
True 8. It is in Tenants best interest for the lease to set the Base Operating Expenses as low as possible.
_______9. A CPI cap is a very get for Tenant and is entirely leverage dependent.
_______10. The promises Tenant makes to Landlord regarding Tenants use of the Premises
often are enforceable by Landlord, as well as by other tenants in the Building.
_______11. Radius restrictions are enforceable, as long as they are reasonable.
_______12. So long as the furnace is part of the mechanical system, than a serious failure to maintain the furnace could result in constructive eviction.
_______13. Tenants lawyer should require the lease to specify an outside drop dead date for all improvements to the Premises to be completed by the Landlord pursuant to the Work Letter Agreement.
_______14. The term of the lease, in most commercial leaseholds, begins the moment Landlord substantially completes the pre-occupancy improvements.
_______15. Typically, the alterations that may be described as fixtures become the property of the Landlord at the end of the Term and must be left in the Premises.
Answer each question fully which is worth 2 points each.
16. Sometimes it is desirable to make some terms of the LOI binding and others not, or carve out a few provisions of the LOI and make them binding. Give examples of a carve out provision below.
17. When is an alteration structural?
18. What are tenant improvement allowances and work letters? Provide examples.
19. What is an expansion right? How is it exercised?
20. A common lease format requires Tenant to obtain Landlords prior written consent to an alteration. What is the test for withholding consent if the Landlord says no?
Answer each multiple choice question worth 2 points each
21. Under a gross lease
a. the tenant pays all property operating expenses, insurance and real estate taxes
b. the landlord pays all property operating expenses, insurance and taxes
c. the tenant pays pass-through expenses
d. the tenant pays insurance and real estate taxes only
22. The tenants right of quiet enjoyment refers to the right to
a. necessary sound-proofing
b. exclusive possession free of interference of the landlord.
c. free use and occupancy of the premises
d. none of the above
23 A lease clause that requires a retail tenant to keep its store open for business during th
entire lease term in known as
- A go dark clause
- A radius restriction.
- A holdover
- A continuous operation clause
24. Commercial rents are quoted and charge based on
a. useable area
b. carpetable area
c. rentable area
d. marketable area
25. A tenant exclusive refers to a retail tenants right to
a. be the only anchor tenant in the shopping center
b. be the only tenant in a shopping center who may offer a particular product or service
c. be the only tenant within a certain radius who can offer a particular product or
service
- be the only tenant in the shopping center who can go dark
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