CRECI Tenant and Owner Relations 2 — Questions and Answers
Question 1: A commercial tenant claims the landlord's failure to repair a broken HVAC system constitutes a breach of the implied warranty of quiet enjoyment. Which legal concept best supports this claim?
- Constructive eviction (Correct answer)
- Actual eviction
- Unlawful detainer
- Rent abatement only
Correct answer: Constructive eviction
Constructive eviction occurs when a landlord's failure to maintain premises renders them substantially unfit, forcing the tenant to vacate.
Question 2: Under a net lease, which expense is the tenant primarily responsible for paying in addition to base rent?
- Property taxes only (Correct answer)
- Mortgage payments
- Landlord's personal income tax
- Capital improvements chosen by the landlord
Correct answer: Property taxes only
In a net lease, the tenant pays base rent plus property taxes, with single-net being the most basic form.
Question 3: A landlord wants to enter a tenant's commercial space to inspect for lease compliance. What should the landlord do first?
- Provide advance written notice as required by the lease (Correct answer)
- Enter immediately since it is a commercial property
- Obtain a court order before every entry
- Wait until the tenant's business is closed
Correct answer: Provide advance written notice as required by the lease
Even in commercial leases, landlords should provide notice as specified in the lease agreement before entering the premises.
Question 4: A commercial tenant subleases part of its space without the landlord's consent, violating the lease. What remedy can the landlord typically pursue?
- Terminate the lease for breach of its terms (Correct answer)
- Automatically assume the sublease agreement
- Sue the subtenant directly for rent
- Only collect a subleasing fee retroactively
Correct answer: Terminate the lease for breach of its terms
An unauthorized sublease is a material breach of the lease, entitling the landlord to terminate the lease agreement.
Question 5: What is the primary purpose of a landlord requiring a personal guarantee from a commercial tenant?
- To hold the individual principals liable if the business entity defaults on rent (Correct answer)
- To eliminate the need for a security deposit
- To allow the landlord to garnish tenant employees' wages
- To transfer ownership of the business upon default
Correct answer: To hold the individual principals liable if the business entity defaults on rent
A personal guarantee makes individual principals personally responsible for lease obligations if the business entity fails to pay.
Question 6: A tenant holding over after lease expiration without a new agreement is classified as which type of tenancy?
- Tenancy at sufferance (Correct answer)
- Tenancy at will
- Periodic tenancy
- Tenancy for years
Correct answer: Tenancy at sufferance
A tenancy at sufferance arises when a tenant remains in possession after the lease expires without the landlord's consent.
Question 7: Which provision in a commercial lease allows the tenant's rent to increase based on the Consumer Price Index?
- Escalation clause (Correct answer)
- Subordination clause
- Attornment clause
- Estoppel clause
Correct answer: Escalation clause
An escalation clause ties periodic rent increases to an index such as the CPI to protect the landlord against inflation.
CRECI Tenant and Owner Relations 2
A commercial tenant claims the landlord's failure to repair a broken HVAC system constitutes a breach of the implied warranty of quiet enjoyment.
Which legal concept best supports this claim?