CMCP Questions - Section 2 (Insurance)
Exam Questions and Answers |100% Pass
What is a building' most valuable asset? - Answer-Tenants
Fair rent calculations may apply to options to do what? - Answer-Renew, expand, and periodic rental
increases
What will the fair market rental value generally ...
What is a single-net lease? - Answer✔✔-Base rent is paid to landlord and included OpEx incurred by the
landlord. Tenant pays property taxes separately. Was commonly used for industrial buildings/warehouses
in the 70s and 80s but not as common today.
What is a double-net lease? (net-net) - Answer✔✔-Base rent is paid to the landlord and includes OpEx.
Tenant pays property taxes and insurance separately. Was commonly used for industrial
buildings/warehouses in the 70s and 80s but not as common today.
What is a triple-net lease? (net-net-net) - Answer✔✔-Rental payments are base rent paid to landlord and
do not include OpEx. Landlord undertakes management of property at the tenant's expense. First used
with single-tenant buildings but now common with large portfolio landlords, especially in urban markets
What is an absolute net lease? - Answer✔✔-Similar to triple-net with even more items being paid for by
the tenant. All cost of owning, maintaining and operating the building paid for by the tenant and usually
paid directly to the providers of the services. Almost always used in a single-tenant building and in cases
where the lease is primarily a financing tool
What is a ground lease? - Answer✔✔-Tenant is simply leasing the ground. Tenant is normally responsible
for all costs associated with the ownership of the ground, as well as building and maintaining the
structure. Often seen for retail pad sites or as alternative to a property sale.
What is the basic premise of the net lease? - Answer✔✔-The building expenses, in addition to the base
rent, are paid for by the tenant, which conveys the risk of year-over-year OpEx to the tenant
When does rental obligation begin? - Answer✔✔-On the commencement date stated in the lease, even
if occupancy does not take place on that date
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