Lease Management and Execution Flashcards

A commercial tenant discovers that a major structural repair is needed in their leased space. The lease is silent on who bears responsibility. Under the common law rule, who is generally obligated to make structural repairs?

Answer: The landlord, as structural elements are part of the building shell

Under common law, landlords are generally responsible for structural repairs unless the lease expressly shifts that obligation to the tenant.

In a triple net (NNN) lease, which three expenses does the tenant typically pay in addition to base rent?

Answer: Property taxes, building insurance, and maintenance costs

In a triple net lease, the tenant pays base rent plus the three 'nets': property taxes, building insurance, and maintenance/operating costs.

What does a 'holdover' provision in a commercial lease typically specify?

Answer: The consequences and rent rate if the tenant continues to occupy after lease expiration without a new agreement

A holdover provision establishes the legal status and typically an increased rent rate (often 125-150% of prior rent) if a tenant remains in the space after lease expiration.

A commercial lease contains a 'force majeure' clause. Which scenario would most likely trigger this provision?

Answer: A government-mandated shutdown prevents the tenant from operating the premises

Force majeure clauses excuse performance obligations when extraordinary events beyond a party's control—such as government orders, natural disasters, or pandemics—prevent performance.

When calculating 'rentable square footage' in a commercial office building, what is included that is NOT included in 'usable square footage'?

Answer: A pro-rata share of common areas like lobbies, hallways, and restrooms

Rentable square footage includes the tenant's usable space plus their proportionate share of common areas, which is why it is always larger than usable square footage.

A tenant in a multi-tenant office building wants to ensure that if the anchor tenant leaves, they can reduce rent or terminate. Which lease clause addresses this?

Answer: Co-tenancy clause

A co-tenancy clause allows a tenant to reduce rent or terminate the lease if specified anchor tenants cease operations, recognizing that other tenants' presence drives customer traffic.

What is the legal effect of a 'merger clause' (also called an integration clause) in a commercial lease?

Answer: It establishes that the written lease is the entire agreement, superseding all prior negotiations

A merger or integration clause states that the written agreement constitutes the complete and final understanding of the parties, preventing reliance on prior oral or written representations.