Lease Negotiation & Terms Flashcards
7 cards from real CHI practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Lease Negotiation & Terms flashcards as text
A landlord includes a 'demolition clause' in a lease. What right does this grant the landlord?
Answer: To terminate the lease early if the building is redeveloped
A demolition clause allows the landlord to terminate the lease before its natural expiration if the property is scheduled for demolition or major redevelopment.
Which lease provision protects a tenant from rent increases tied to rising property taxes or operating costs in a gross lease?
Answer: Expense stop clause
An expense stop sets the maximum operating expense amount the landlord absorbs; costs above the stop are passed to the tenant, while a gross lease with no stop shields tenants from all increases.
During lease negotiations, a tenant requests a 'co-tenancy clause.' What protection does this provide?
Answer: Rent reduction rights if a key anchor tenant vacates the property
A co-tenancy clause allows tenants—especially retailers—to reduce rent or terminate the lease if an anchor tenant departs, reducing customer traffic.
What does 'usable square footage' refer to in commercial lease negotiations, as distinct from 'rentable square footage'?
Answer: The space a tenant actually occupies exclusively, excluding shared areas
Usable square footage is the space the tenant physically occupies, while rentable square footage adds a proportionate share of common areas such as lobbies and hallways.
A 'right of first offer' (ROFO) clause in a lease gives the tenant:
Answer: The right to be notified and bid before space is offered to others
A ROFO requires the landlord to present terms to the existing tenant before marketing space or the building to outside parties.
Which clause in a residential lease typically requires a tenant to give written notice before vacating, protecting the landlord's ability to find a replacement tenant?
Answer: Advance notice requirement
An advance notice requirement—commonly 30 or 60 days—obligates the tenant to inform the landlord in writing before moving out to allow time for re-leasing.
In lease negotiation, what is a 'tenant improvement allowance' (TIA)?
Answer: Landlord funds provided to build out or renovate the leased space
A TIA is a landlord contribution toward the cost of constructing or improving the tenant's space to meet their specific needs.