CGA Tenant Relations & Retention 2

Question 1

Which lease clause gives a landlord the right to relocate a tenant to a comparable space within the same building?

Accepted Answer

Relocation clause

Answer

A relocation clause grants landlords flexibility to move tenants to equivalent space, typically with advance notice and reimbursement of moving costs.

Question 2

When a tenant exercises a right of first refusal to purchase a property, what triggers this right?

Accepted Answer

Landlord's decision to sell to a third party

Answer

A right of first refusal is triggered when the landlord receives a bona fide offer from a third party and must offer the tenant the same terms before accepting.

Question 3

In commercial real estate, a 'gross-up' provision in a lease primarily benefits which party?

Accepted Answer

Landlord

Answer

A gross-up provision allows landlords to calculate operating expenses as if the building were fully occupied, preventing under-recovery of expenses when vacancy exists.

Question 4

A tenant improvement allowance (TIA) that exceeds actual construction costs typically results in what outcome for the tenant?

Accepted Answer

Rent credit applied to future months

Answer

Excess TIA funds are most commonly applied as rent credits rather than paid as cash, though lease terms vary and should be reviewed carefully.

Question 5

What is 'co-tenancy' in retail leases?

Accepted Answer

A provision allowing rent reduction if anchor tenants leave

Answer

Co-tenancy clauses protect smaller retailers by allowing rent reduction or early termination if a major anchor tenant vacates, reducing foot traffic.

(CGA) Certified General Appraiser Practice Test

(CGA) Certified General Appraiser Practice Test

CGA Tenant Relations & Retention 2