Practice Test Geeks(CLP) Certified Leasing Professional Practice Test
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Lease Negotiation & Terms Flashcards

7 cards from real CLP 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

  1. A prospective tenant requests a 'free rent' period during lease negotiation. What is the correct term for this concession?

    Answer: Rent abatement

    Rent abatement is the term for a period during which the tenant pays no rent, often granted as a concession during negotiations.

  2. Which lease clause gives a tenant the right to purchase the property at a predetermined price during the lease term?

    Answer: Option to purchase

    An option to purchase grants the tenant the contractual right to buy the property at a specified price within a set timeframe.

  3. During negotiations, a landlord insists on a personal guarantee from the principals of a corporate tenant. What risk does this address?

    Answer: Credit risk of the corporate entity

    A personal guarantee protects the landlord if the corporate tenant defaults, holding individual principals personally liable for lease obligations.

  4. What does a 'kick-out clause' allow a retail tenant to do?

    Answer: Terminate the lease if sales fall below a threshold

    A kick-out clause permits a tenant to exit the lease early if gross sales do not meet a contractually defined minimum level.

  5. A lease contains a 'co-tenancy clause.' What event typically triggers this provision?

    Answer: An anchor tenant vacates or a minimum occupancy level falls below a threshold

    Co-tenancy clauses activate when an anchor tenant leaves or overall occupancy drops, often allowing the tenant to pay reduced rent or terminate.

  6. In a negotiation, the landlord proposes a 'gross-up' provision. How does this typically affect operating expense calculations?

    Answer: It adjusts expenses to reflect 100% occupancy so no tenant benefits from vacancies

    A gross-up provision inflates variable operating expenses to a full-occupancy level, preventing tenants from paying a disproportionately low share due to vacancies.

  7. A tenant negotiates a 'right of first offer' (ROFO) on adjacent vacant space. How does a ROFO differ from a right of first refusal (ROFR)?

    Answer: ROFO requires the landlord to offer the space to the tenant before marketing it; ROFR requires the tenant to match a third-party offer

    Under a ROFO the landlord must offer the space to the tenant first before marketing, while a ROFR only triggers once a third-party offer is received.