BOMA BOMA Lease Administration

Question 1

Under BOMA standards, which lease type places the most financial risk on the tenant by requiring them to pay all operating expenses in addition to base rent?

Accepted Answer

Triple net (NNN) lease

Answer

A triple net lease requires the tenant to pay base rent plus property taxes, insurance, and all operating expenses, placing maximum financial risk on the tenant.

Question 2

The BOMA Standard Method for measuring office buildings is primarily used to determine which lease component?

Accepted Answer

Rentable square footage

Answer

The BOMA Standard Method establishes a consistent methodology for calculating rentable square footage, which directly determines the basis for rent calculations.

Question 3

What does the 'load factor' (also called the add-on factor) represent in commercial leasing?

Accepted Answer

The percentage added to usable area to arrive at rentable area

Answer

The load factor is the percentage added to a tenant's usable square footage to account for their share of common areas, converting usable area to rentable area.

Question 4

In a base year lease, what triggers a tenant's obligation to pay operating expense escalations?

Accepted Answer

Operating expenses exceeding the base year amount

Answer

In a base year lease, tenants pay their proportionate share of operating expense increases above the established base year expense level.

Question 5

Which clause in a commercial lease grants the tenant the right to renew their lease at a predetermined rent or at market rate?

Accepted Answer

Option to renew clause

Answer

An option to renew clause gives the tenant a contractual right to extend their lease term, typically requiring advance written notice within a specified timeframe.

BOMA - Building Owners & Managers Association Practice Test

BOMA - Building Owners & Managers Association Practice Test

BOMA BOMA Lease Administration