Real Estate Property Management 2 — Questions and Answers
Question 1: In a triple-net (NNN) lease, the tenant is responsible for:
- Base rent only
- Base rent plus property taxes, insurance, and maintenance (Correct answer)
- Utilities only
- Common area maintenance only
Correct answer: Base rent plus property taxes, insurance, and maintenance
A triple-net lease requires the tenant to pay base rent plus the three 'nets': property taxes, building insurance, and maintenance/repairs.
Question 2: A percentage lease requires the tenant to pay:
- A fixed rent regardless of sales volume
- Base rent plus a percentage of gross sales above a breakpoint (Correct answer)
- Rent based on property tax assessment
- Rent equal to a percentage of net income
Correct answer: Base rent plus a percentage of gross sales above a breakpoint
Percentage leases are common in retail settings; the tenant pays a minimum base rent plus a percentage of gross sales that exceed a specified natural breakpoint.
Question 3: CAM (Common Area Maintenance) charges in a commercial lease are used to cover:
- The tenant's private office maintenance
- Shared costs for lobbies, parking lots, landscaping, and hallways (Correct answer)
- Property management fees only
- Roof and structural repairs exclusively
Correct answer: Shared costs for lobbies, parking lots, landscaping, and hallways
CAM charges allocate each tenant's proportionate share of maintaining shared spaces in multi-tenant properties such as shopping centers and office buildings.
Question 4: An estoppel certificate in commercial real estate is a document signed by a tenant that:
- Terminates the lease early
- Certifies the current lease terms and status as accurate (Correct answer)
- Transfers the lease to a new tenant
- Waives the tenant's security deposit
Correct answer: Certifies the current lease terms and status as accurate
An estoppel certificate is a binding statement confirming lease terms, payment status, and any disputes, commonly required by lenders or buyers during due diligence.
Question 5: Constructive eviction occurs when a landlord:
- Serves formal eviction papers
- Fails to maintain the property to a habitable standard, effectively forcing the tenant to leave (Correct answer)
- Raises rent without notice
- Refuses to renew the lease
Correct answer: Fails to maintain the property to a habitable standard, effectively forcing the tenant to leave
Constructive eviction happens when a landlord's failure to maintain habitable conditions makes the premises unfit, allowing the tenant to vacate and terminate the lease.
Question 6: A holdover tenant who remains after the lease expires without permission becomes a:
- Month-to-month tenant automatically
- Trespasser subject to immediate eviction
- Tenant at sufferance until the landlord acts (Correct answer)
- Life estate holder
Correct answer: Tenant at sufferance until the landlord acts
A holdover tenant becomes a tenant at sufferance — they have no landlord permission to remain and may be treated as a trespasser or converted to a periodic tenancy at the landlord's option.
Real Estate Property Management 2
In a triple-net (NNN) lease, the tenant is responsible for: