BOMA Lease Administration Flashcards

Under BOMA standards, which lease type places the most financial risk on the tenant by requiring them to pay all operating expenses in addition to base rent?

Answer: Triple net (NNN) lease

A triple net lease requires the tenant to pay base rent plus property taxes, insurance, and all operating expenses, placing maximum financial risk on the tenant.

The BOMA Standard Method for measuring office buildings is primarily used to determine which lease component?

Answer: Rentable square footage

The BOMA Standard Method establishes a consistent methodology for calculating rentable square footage, which directly determines the basis for rent calculations.

What does the 'load factor' (also called the add-on factor) represent in commercial leasing?

Answer: The percentage added to usable area to arrive at rentable area

The load factor is the percentage added to a tenant's usable square footage to account for their share of common areas, converting usable area to rentable area.

In a base year lease, what triggers a tenant's obligation to pay operating expense escalations?

Answer: Operating expenses exceeding the base year amount

In a base year lease, tenants pay their proportionate share of operating expense increases above the established base year expense level.

Which clause in a commercial lease grants the tenant the right to renew their lease at a predetermined rent or at market rate?

Answer: Option to renew clause

An option to renew clause gives the tenant a contractual right to extend their lease term, typically requiring advance written notice within a specified timeframe.

What is a 'tenant estoppel certificate' used for in commercial real estate?

Answer: To certify the current status and terms of a lease to a third party

A tenant estoppel certificate is a signed document in which the tenant confirms current lease terms and status, typically required by lenders or buyers during property transactions.