Lease Origination and Structure 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 Origination and Structure flashcards as text
A lease clause requiring the tenant's lease rights to yield to any existing or future mortgage on the property is called a:
Answer: Subordination clause
A subordination clause makes the tenant's leasehold interest junior to the lender's mortgage lien on the property.
What does a 'SNDA' agreement stand for in commercial leasing?
Answer: Subordination, Non-Disturbance, and Attornment Agreement
An SNDA is a tripartite agreement between landlord, tenant, and lender addressing subordination of the lease, tenant protection in foreclosure, and tenant recognition of a new owner.
A retail tenant's lease contains a clause stating that if an anchor tenant vacates, the tenant may reduce rent by 25%. This is an example of a:
Answer: Co-tenancy clause
A co-tenancy clause ties the tenant's rent obligations to the presence or performance of key anchor tenants in the same property.
Which of the following BEST describes the 'load factor' in commercial real estate leasing?
Answer: The ratio of rentable to usable square footage
The load factor (or add-on factor) is the ratio of rentable to usable square footage, representing the tenant's proportionate share of common areas.
Under a fully serviced gross lease, which party is responsible for paying building operating expenses?
Answer: The landlord pays all operating expenses from the gross rent received
Under a fully serviced gross lease, the landlord collects one inclusive rent and uses it to pay all operating expenses including taxes, insurance, and maintenance.
Which document confirms that a lease is in full force, states the lease commencement date, and is often required by a lender financing the property?
Answer: Estoppel certificate
An estoppel certificate is signed by the tenant to certify current lease terms, that the lease is in effect, and that no landlord defaults exist, which lenders require before financing.
A lease assignment differs from a sublease primarily because in an assignment:
Answer: The original tenant transfers all rights and typically all obligations to the assignee
In an assignment, the original tenant transfers the entire leasehold interest to the assignee, whereas in a sublease the original tenant remains primarily liable under the master lease.