Property Management
What is a 'master lease' arrangement in Delaware commercial real estate?
AThe primary lease in a multi-story building that all sub-leases reference
BA lease under which a master lessee (often a property management company) leases the entire property from the owner and then sublets individual units to end tenants — taking on the obligations of both landlord and tenant✓ Correct
CA long-term lease agreement requiring a minimum 10-year term
DA government lease for public housing management
Explanation
In a master lease arrangement, a master lessee leases an entire property from the owner at a negotiated (typically below-market) rent, then sublets individual units at market rate, profiting from the spread. The owner gets guaranteed income; the master lessee takes on management and vacancy risk.
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Key Terms to Know
Listing Agreement
A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Math Concepts
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