BOMA Commercial Real Estate Law & Regulations 2

Question 1

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

Accepted Answer

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

Answer

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.

Question 2

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

Accepted Answer

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

Answer

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.

Question 3

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

Accepted Answer

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

Answer

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.

Question 4

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

Accepted Answer

Leases exceeding one year must be in writing to be enforceable

Answer

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.

Question 5

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

Accepted Answer

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

Answer

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.

BOMA - Building Owners & Managers Association Practice Test

BOMA - Building Owners & Managers Association Practice Test

BOMA Commercial Real Estate Law & Regulations 2