CRECI Commercial Lease Analysis 3

Question 1

A 'subordination, non-disturbance, and attornment' (SNDA) agreement primarily protects:

Accepted Answer

The tenant's right to remain in occupancy if a lender forecloses

Answer

An SNDA ensures that if the property is foreclosed, the tenant's lease survives and the new owner must honor its terms, provided the tenant recognizes the new owner.

Question 2

In commercial leasing, 'rentable square footage' differs from 'usable square footage' because it:

Accepted Answer

Includes a pro-rata share of common areas

Answer

Rentable square footage adds the tenant's proportionate share of common areas (lobbies, restrooms, corridors) to the usable area, resulting in a higher figure.

Question 3

Which provision in a commercial lease restricts the landlord from leasing nearby space to direct competitors of the tenant?

Accepted Answer

Exclusivity clause

Answer

An exclusivity clause grants the tenant the sole right to conduct a particular type of business within the property or a defined area, preventing the landlord from leasing to competitors.

Question 4

A 'dark store' clause allows a tenant to:

Accepted Answer

Stop operating the business while still paying rent

Answer

A dark store clause permits a tenant to vacate and cease operations while continuing to pay rent, often used strategically by large retailers to limit competition.

Question 5

Under a modified gross lease, which party typically pays for increases in operating expenses beyond a base-year amount?

Accepted Answer

The tenant pays increases above the base-year stop

Answer

In a modified gross lease, the landlord covers operating expenses up to a base-year stop, and the tenant is responsible for any expense increases above that threshold.

(CRECI) Commercial Real Estate Certification Institute Practice Test

(CRECI) Commercial Real Estate Certification Institute Practice Test

CRECI Commercial Lease Analysis 3