Commercial Real Estate Law & Regulations Flashcards

What does 'estoppel certificate' require a commercial tenant to certify?

Answer: The accuracy of the lease terms, current status, and absence of landlord defaults as of a specific date

An estoppel certificate is a written statement by the tenant confirming key lease facts (term, rent, options, defaults) that is binding on the tenant and relied upon by potential buyers or lenders.

What is 'privity of contract' relevant to in commercial lease assignments?

Answer: Only parties directly in contract with each other can enforce the contract's obligations against one another

Privity of contract means only the original contracting parties can enforce a contract; in lease assignments, the original tenant may remain liable because the landlord has no privity with the assignee.

What does the 'implied warranty of suitability' in some jurisdictions require of commercial landlords?

Answer: That the leased premises are suitable for the tenant's intended commercial purpose at lease inception

Some jurisdictions recognize an implied warranty that commercial premises are suitable for the tenant's intended use, giving tenants a remedy when the landlord knows the space cannot serve the intended purpose.

What is the 'statute of frauds' requirement for commercial real estate leases?

Answer: Leases exceeding one year must be in writing to be enforceable

The Statute of Frauds, adopted in virtually all US states, requires leases for more than one year to be in writing and signed by the party to be charged to be legally enforceable.

What does 'landlord's lien' on tenant property mean in commercial leasing?

Answer: The landlord's security interest in tenant's personal property located in the leased premises to secure rent obligations

Some states give landlords a statutory lien on tenant's personal property (equipment, inventory) in the leased space as security for unpaid rent, though many states have abolished this.

What is 'commercial property tax assessment appeal' and why do building owners pursue it?

Answer: A formal process challenging the government's assessed property value to potentially reduce tax liability

Property tax appeal is a process where building owners challenge the assessor's valuation of their property, arguing it is over-assessed relative to market value, potentially resulting in lower property taxes.