BOMA Commercial Real Estate Law & Regulations 1 — Questions and Answers
Question 1: What does 'constructive eviction' mean in commercial real estate law?
- When a landlord's failure to maintain the property makes it unusable, effectively forcing the tenant to vacate (Correct answer)
- When a landlord physically removes a tenant's belongings from the premises
- When a court orders a tenant to vacate following a successful eviction proceeding
- When a tenant vacates voluntarily before lease expiration due to business relocation
Correct answer: When a landlord's failure to maintain the property makes it unusable, effectively forcing the tenant to vacate
Constructive eviction occurs when a landlord's breach of the lease—such as failing to provide heat, water, or safe conditions—so substantially impairs the tenant's use that the tenant is forced to vacate.
Question 2: What is the 'covenant of quiet enjoyment' in a commercial lease?
- A landlord's promise that the tenant will have undisturbed possession and use of the leased premises (Correct answer)
- A lease clause requiring tenants to minimize noise that disturbs neighboring occupants
- A provision granting tenants exclusive rights to operate their type of business in the building
- A warranty that the building meets all applicable noise ordinances and sound codes
Correct answer: A landlord's promise that the tenant will have undisturbed possession and use of the leased premises
The covenant of quiet enjoyment is the landlord's implied or express promise that the tenant's peaceful possession and use of the leased space will not be disturbed by the landlord or superior title holders.
Question 3: Under the Americans with Disabilities Act (ADA), Title III applies to commercial real estate by requiring:
- Public accommodations to remove barriers to accessibility where readily achievable (Correct answer)
- All commercial buildings to meet new construction accessibility standards regardless of age
- Building owners to provide accommodations for their own employees with disabilities
- Landlords to modify existing leases to accommodate disabled tenants upon request
Correct answer: Public accommodations to remove barriers to accessibility where readily achievable
ADA Title III requires places of public accommodation to remove architectural barriers where doing so is 'readily achievable' (easily accomplishable without much difficulty or expense).
Question 4: What is 'eminent domain' in the context of commercial real estate?
- The government's power to take private property for public use with just compensation (Correct answer)
- A landlord's right to reclaim leased space when a tenant defaults
- The right of a senior lender to foreclose on a commercial property
- A municipality's authority to condemn and demolish unsafe structures
Correct answer: The government's power to take private property for public use with just compensation
Eminent domain (also called condemnation) is the government's constitutional power to acquire private property for public use, requiring payment of fair market value compensation to the owner.
Question 5: What does 'recording' a commercial lease or memorandum of lease accomplish?
- Providing public notice of the tenant's interest in the property, protecting against subsequent purchasers (Correct answer)
- Registering the lease with the tax authority for proper property assessment
- Creating a legally binding lease that would otherwise be unenforceable
- Notifying all building occupants of the new tenant's occupancy rights
Correct answer: Providing public notice of the tenant's interest in the property, protecting against subsequent purchasers
Recording a lease or lease memorandum in public land records gives notice of the tenant's leasehold interest, protecting the tenant if the property is sold or if the landlord's lender forecloses.
Question 6: What is 'zoning' and how does it affect commercial real estate?
- Local government regulations designating how land may be used, restricting or permitting specific commercial activities (Correct answer)
- A building's classification system determining applicable fire and life safety codes
- Federal environmental regulations governing commercial land development near wetlands
- A system for allocating parking spaces among multiple commercial tenants
Correct answer: Local government regulations designating how land may be used, restricting or permitting specific commercial activities
Zoning ordinances divide municipalities into districts with specific permitted uses (office, retail, industrial, residential), directly affecting what businesses can operate in a given building or location.
BOMA Commercial Real Estate Law & Regulations 1
What does 'constructive eviction' mean in commercial real estate law?