Page 1 of 46
RECA COMMERCIAL UNIT3 LATEST ACTUAL EXAM 110
QUESTIONS AND CORRECT DETAILED ANSWERS
|ALREADY GRADED A+
What does Fee Simple mean? ......ANSWER........'Fee' means the
land can be inherited and 'simple' means the inheritance is
unqualified as to who can inherit it.
Bundle of rights include (x4) ......ANSWER........Possession (to
occupy and keep out others)
Control (to alter the property physically)
Enjoyment (no interference from others)
Disposition (to convey all or part to another)
leased fee or leased fee estate ......ANSWER........A fee simple
estate that is subject to a lease is referred to as a leased fee or
leased fee estate.
Is a license that grants permission to an individual or business to
use a property transferable or not? ......ANSWER........No, If the
property is sold, the licence is usually terminated. A licence
grants permission to an individual or business to use a property
for a specified purpose but does not grant exclusive possession
of the property. A licence does not create interest in the
property and cannot be transferred to a third party. (different
than a lease which is transferable)
The Statute of Frauds ......ANSWER........sale or transfer of land
must be signed by all parties who will be bound
"You need to ensure all aspects of a leasing transaction (e.g.
offers, counteroffers) are completed in writing."
,Page 2 of 46
The Statute of Frauds is part of English common law and
originated over 350 years ago when it was enacted by the
British Parliament. The Statute of Frauds requires that certain
contracts, such as those involving the sale or transfer of land, be
in writing and that such contracts be signed by all of the parties
who will be bound by that contract.
The purpose of the Statute of Frauds is the prevention of injury
from fraudulent conduct. In general, written contracts are easier
to prove and enforce. In addition, they decrease the chance of
future litigation and give the parties the opportunity to review
essential terms and conditions of the contract before it is
finalized.
a lease agreement must contain specific information, the lack of
which could render the agreement invalid. The required elements
are (x8) ......ANSWER........1. Name of Lessor and Lessee
2. Description of the premises
3. Commencement and expiration dates
4. Consideration or the exchange of something of value
5. Renewal privilege (any renewal privilege should be spelled
out in detail)
6. Legal Purpose (describe the purpose for which the premises
are to be used)
7. Rules, regulations, policies, and procedures for each party
,Page 3 of 46
8. Signatures
Landlords and tenants also have some general rights and
obligations - landlord: ......ANSWER........- Must fulfill their
obligations as outlined by the lease agreement
-Must notify tenants in writing of specific breaches of the lease
and allow a reasonable period of time for tenants to comply.
-May have the right to terminate a tenancy when the tenant fails
to fulfill its lease obligations as outlined in the lease
-Have the right to apply to the courts to seek damages fro the
tenant for the loss of rental income owed for the balance of the
term of a lease
Landlords and tenants also have some general rights and
obligations - Tenants ......ANSWER........-Must fulfill their
obligations as outlined by the lease agreement
-Must pay rent to the landlord on the due date agreed to in the
lease
-Cannot withhold rent because the landlord has failed to fulfill its
lease obligations
-Have the right to take their disputes with the landlord to the
courts for disputes concerning money or personal property
Offer to Lease (document) ......ANSWER........In commercial real
estate, an offer to lease precedes a formal lease agreement. An
offer to lease covers the key terms and conditions and is best
described as a consensus between the landlord and tenant
intended to lead to a final lease agreement. The offer to lease
confirms that, although not everything has been settled, full and
detailed consensus will be included in the forthcoming lease
agreement. Ideally, all substantive and material matters are
, Page 4 of 46
addressed in the offer to lease, leaving only minor amendments
to be settled in the final lease agreement.
Base Lease (document) ......ANSWER........A base lease is the
standard lease agreement prepared by a landlord that defines
the minimum tenancy requirements applicable to all tenants in a
specific complex. It contains minimum rents, services provided,
allocation of common areas, and other items common to all
tenants. Tailoring of the base lease is necessary for tenants with
unique and/or diverse needs.
Schedules (documents) ......ANSWER........Schedules are
supplementary documents, such as maps or forms, included with
the offer to lease and often directly referenced in its terms.
Schedules relate to elements required from, or requested by, the
landlord. When the lease agreement is signed, the schedules are
considered part of the agreement
Common schedules in commercial leases include the following:
(x4) ......ANSWER........Premises: This schedule refers to a large
scale building plan or floor plan showing the exact configuration
of the leased premises, together with all mechanical details. The
plan is required by the tenant's interior designer or architect as
the basis for detailed interior construction plans for submission to
and approval by the landlord.
Land: This schedule is a plot plan or site plan showing the overall
lands, dimensions, access and egress systems, boundary roads or
highways, parking, loading facilities, and the building located
thereon, together with common areas. The demised or leased
premises will be outlined on the site plan.
RECA COMMERCIAL UNIT3 LATEST ACTUAL EXAM 110
QUESTIONS AND CORRECT DETAILED ANSWERS
|ALREADY GRADED A+
What does Fee Simple mean? ......ANSWER........'Fee' means the
land can be inherited and 'simple' means the inheritance is
unqualified as to who can inherit it.
Bundle of rights include (x4) ......ANSWER........Possession (to
occupy and keep out others)
Control (to alter the property physically)
Enjoyment (no interference from others)
Disposition (to convey all or part to another)
leased fee or leased fee estate ......ANSWER........A fee simple
estate that is subject to a lease is referred to as a leased fee or
leased fee estate.
Is a license that grants permission to an individual or business to
use a property transferable or not? ......ANSWER........No, If the
property is sold, the licence is usually terminated. A licence
grants permission to an individual or business to use a property
for a specified purpose but does not grant exclusive possession
of the property. A licence does not create interest in the
property and cannot be transferred to a third party. (different
than a lease which is transferable)
The Statute of Frauds ......ANSWER........sale or transfer of land
must be signed by all parties who will be bound
"You need to ensure all aspects of a leasing transaction (e.g.
offers, counteroffers) are completed in writing."
,Page 2 of 46
The Statute of Frauds is part of English common law and
originated over 350 years ago when it was enacted by the
British Parliament. The Statute of Frauds requires that certain
contracts, such as those involving the sale or transfer of land, be
in writing and that such contracts be signed by all of the parties
who will be bound by that contract.
The purpose of the Statute of Frauds is the prevention of injury
from fraudulent conduct. In general, written contracts are easier
to prove and enforce. In addition, they decrease the chance of
future litigation and give the parties the opportunity to review
essential terms and conditions of the contract before it is
finalized.
a lease agreement must contain specific information, the lack of
which could render the agreement invalid. The required elements
are (x8) ......ANSWER........1. Name of Lessor and Lessee
2. Description of the premises
3. Commencement and expiration dates
4. Consideration or the exchange of something of value
5. Renewal privilege (any renewal privilege should be spelled
out in detail)
6. Legal Purpose (describe the purpose for which the premises
are to be used)
7. Rules, regulations, policies, and procedures for each party
,Page 3 of 46
8. Signatures
Landlords and tenants also have some general rights and
obligations - landlord: ......ANSWER........- Must fulfill their
obligations as outlined by the lease agreement
-Must notify tenants in writing of specific breaches of the lease
and allow a reasonable period of time for tenants to comply.
-May have the right to terminate a tenancy when the tenant fails
to fulfill its lease obligations as outlined in the lease
-Have the right to apply to the courts to seek damages fro the
tenant for the loss of rental income owed for the balance of the
term of a lease
Landlords and tenants also have some general rights and
obligations - Tenants ......ANSWER........-Must fulfill their
obligations as outlined by the lease agreement
-Must pay rent to the landlord on the due date agreed to in the
lease
-Cannot withhold rent because the landlord has failed to fulfill its
lease obligations
-Have the right to take their disputes with the landlord to the
courts for disputes concerning money or personal property
Offer to Lease (document) ......ANSWER........In commercial real
estate, an offer to lease precedes a formal lease agreement. An
offer to lease covers the key terms and conditions and is best
described as a consensus between the landlord and tenant
intended to lead to a final lease agreement. The offer to lease
confirms that, although not everything has been settled, full and
detailed consensus will be included in the forthcoming lease
agreement. Ideally, all substantive and material matters are
, Page 4 of 46
addressed in the offer to lease, leaving only minor amendments
to be settled in the final lease agreement.
Base Lease (document) ......ANSWER........A base lease is the
standard lease agreement prepared by a landlord that defines
the minimum tenancy requirements applicable to all tenants in a
specific complex. It contains minimum rents, services provided,
allocation of common areas, and other items common to all
tenants. Tailoring of the base lease is necessary for tenants with
unique and/or diverse needs.
Schedules (documents) ......ANSWER........Schedules are
supplementary documents, such as maps or forms, included with
the offer to lease and often directly referenced in its terms.
Schedules relate to elements required from, or requested by, the
landlord. When the lease agreement is signed, the schedules are
considered part of the agreement
Common schedules in commercial leases include the following:
(x4) ......ANSWER........Premises: This schedule refers to a large
scale building plan or floor plan showing the exact configuration
of the leased premises, together with all mechanical details. The
plan is required by the tenant's interior designer or architect as
the basis for detailed interior construction plans for submission to
and approval by the landlord.
Land: This schedule is a plot plan or site plan showing the overall
lands, dimensions, access and egress systems, boundary roads or
highways, parking, loading facilities, and the building located
thereon, together with common areas. The demised or leased
premises will be outlined on the site plan.
