CLP Lease Negotiation & Terms 2

Question 1

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

Accepted Answer

Rent abatement

Answer

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

Question 2

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

Accepted Answer

Option to purchase

Answer

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

Question 3

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

Accepted Answer

Credit risk of the corporate entity

Answer

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

Question 4

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

Accepted Answer

Terminate the lease if sales fall below a threshold

Answer

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

Question 5

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

Accepted Answer

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

Answer

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

(CLP) Certified Leasing Professional Practice Test