Chapter 30 Flashcards
Industrial leases tend to be for …
Space in office buildings tend to be leased for ….
3 to 5 years.
Most industrial leases have 3 to 5 year terms , but many tenants prefer longer leases , especially when they are installing expensive equipment that would be very difficult to remove.
Space in office buildings tends to be leased for a 3 to 5 year term with the tenant often having the option to lease for an additional 3 to 5 year term.
A lease restricts a commercial tenant’s business activities in what clause ?
Use Clause
The use clause is a lease provision that restricts a commercial tenant’s use of the rented space by indicated what business activities are allowed by the tenant.
A prospective buyer is given critical information on the relationship between the owner and the tenants through a(n) ….
Estoppel
An estoppel certificate is a document to give a third party , such as a prospective buyer , critical information on the RELATIONSHIP BETWEEN THE OWNER AND HIS OR HER TENANT.
Which type of lease includes fluctuating periodic rent increases and a LOW BASE rent ?
Indexed lease
Since the rent increases with indexed leases are uncertain based on the consumer price index , it’s common for the owner to accept a LOWER BASE RENTthan he or she might in the case or a step up method.
Which lease option allows the owner to relocate the tenant to another space in the same building the term of the lease ?
Tenant relocation option.
Which lease clause charges a tenant for increases in operation expenses during the lease term ?
Operation stop.
An operation stop in a lease stipulates an amount of operation expenses above which the tenant must bear.
What lease option provides a hedge against changes in a he cost if leasing the space since the tenant is a partial owner of the building ?
Proposing an equality participation.
Which type of insurance protects the tenant if the lease is canceled due to circumstances beyond that tenants control ?
Lease hold.
Leasehold insurance protects a tenant if the lease is canceled due to circumstances beyond his or her control and the lease lease baby has to rent elsewhere at a higher rent.
In NEW YORK , what is the amount or security deposit allowed for commercial purposes for commercial rentals?
UNLIKE residential landlords , who in many states may not ask for more then two months’ rent as a deposit , commercial landlords may demand whatever amount they think they need as a cushion to cover rent and other tenants financial obligations.
Leases that include a provision for PERIODIC rent increase are what kind of lease ?
Step - up lease .
Some leases include a step - up provision that spell out how he rent will increase periodically and gives the specific dates of those increases.
Which of the following is NOT a type of lease escalation clause ?
Indirect operating
Different types of escalated lease clauses are
Direct Operations
Base year
Consumer price index
Proportionate share of occupancy
Many long - term commercial leases contain a/n ______ in which the parties agree to rent adjustments based on set increases in taxes , insurance, maintenance , and other operating costs.
Lease escalated clause
With a lease escalation clause , the parties agree to a rent adjustment based on set increases on taxes , insurance, maintenance, and other operating costs.
Why is the consumer price index important to commercial clients ?
Some lease increases are based on it.
When the landlord pay the electric usage for the ENTIRE BUILDING on one meter , this is called …
Master Metering.
If an environment issue occurs when the agricultural property is leases , who is ultimately responsible for the issue ?
The landlord.
In the event of an environmental problem the owner is ultimately responsible , but it’s important that the tenant agree in the lease to adhere to appropriate and acceptable farm practices and legislation relating to the environment, such as manure disposal and pesticide and herbicide applications.
