ContractsIntermediateArizona Exam

An Arizona commercial lease that has a 'co-tenancy clause' provides:

AA lease provision requiring every tenant in the center to maintain continuous operations and agree to lease terms approved by the anchor tenant's counsel

BA provision entitling any tenant to sublease up to 25% of their demised space to an affiliated entity without landlord approval during the initial lease termCorrect

CThat the tenant can reduce rent or terminate the lease if a key anchor tenant (or specific occupancy level) leaves the center

DA restriction preventing any two competing retailers from occupying adjacent suites, protecting each tenant's exclusive trade area within the center

Why A provision entitling any tenant to sublease up to 25% of their demised space to an affiliated entity without landlord approval during the initial lease term Is Correct

Answer B: A provision entitling any tenant to sublease up to 25% of their demised space to an affiliated entity without landlord approval during the initial lease term

Co-tenancy clauses are common in retail leases, giving tenants the right to reduce rent or terminate if a named anchor tenant leaves or if occupancy falls below a threshold, because the tenant's business depends on foot traffic from the anchor.

Exam Tip: Contracts

Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.

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Contingency

A condition in a purchase contract that must be satisfied before the sale can proceed to closing.

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