Property Management
What is 'tenant default' in a Delaware commercial lease?
AA tenant's decision to move out before the lease expires
BThe tenant's failure to meet lease obligations — including failure to pay rent, violating use restrictions, or abandoning the property✓ Correct
CThe tenant's default on their own business loan
DA default on the property's first mortgage by the tenant
Explanation
Tenant default occurs when the tenant fails to meet their obligations under the lease — most commonly failure to pay rent, but also including violation of use restrictions, failure to maintain the premises, or unauthorized subletting.
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Key Terms to Know
Earnest Money
A 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.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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