Contracts
A Massachusetts commercial tenant's lease contains a 'holdover' clause providing that if the tenant stays after the lease expires without a new agreement, the tenancy converts to a month-to-month tenancy at 150% of the prior rent. This provision is:
AUnenforceable under Massachusetts law
BGenerally enforceable as the parties agreed to these terms✓ Correct
COnly enforceable for residential tenancies
DRequires court approval to implement
Explanation
Holdover provisions in commercial leases in Massachusetts are generally enforceable as written—the parties freely negotiated the terms, and a penalty rent (150%) for holding over without a new agreement is a common and enforceable commercial provision.
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Key Terms to Know
Purchase Agreement
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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.
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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