Practice Test Geeks(CLP) Certified Leasing Professional Practice Test
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Lease Origination and Structure Flashcards

7 cards from real CLP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Lease Origination and Structure flashcards as text

  1. A prospective tenant requests a lease with a fixed rent for the entire 10-year term. What type of lease structure does this describe?

    Answer: Flat lease

    A flat lease (also called a straight lease) maintains the same rent amount throughout the entire lease term.

  2. Which document typically precedes a formal commercial lease and outlines the basic terms both parties intend to negotiate?

    Answer: Letter of intent (LOI)

    A letter of intent (LOI) is a non-binding preliminary document that outlines the key deal points before a formal lease is drafted.

  3. In a net lease, which expense does the tenant typically pay directly in addition to base rent?

    Answer: Property taxes

    In a net lease, tenants pay base rent plus some or all operating expenses such as property taxes, insurance, and maintenance.

  4. A lease clause that allows the landlord to recapture the space if the tenant's sales fall below a minimum threshold is called a:

    Answer: Kick-out clause

    A kick-out clause (also called a co-tenancy or termination clause) allows one party to terminate the lease if certain performance benchmarks are not met.

  5. When originating a retail lease, which factor is MOST important for determining base rent in a percentage lease?

    Answer: Breakpoint sales volume

    In a percentage lease, the breakpoint is the sales level at which the tenant begins paying percentage rent above the base rent.

  6. A landlord wants to ensure the building's operating expenses are covered regardless of vacancies. Which lease type BEST accomplishes this?

    Answer: Triple net lease

    In a triple net (NNN) lease, tenants pay base rent plus taxes, insurance, and maintenance, so the landlord receives rent largely unaffected by operating costs.

  7. During lease origination, what does 'free rent' as a concession typically represent from an accounting perspective?

    Answer: Deferred rent recognized straight-line over the lease term

    Free rent concessions are generally recognized on a straight-line basis over the full lease term under accounting standards, not as a permanent rent reduction.