Property Management
A master lease in commercial real estate allows:
AOnly the largest tenant to control the building
BAn investor to lease an entire building from the owner and sublease individual units to tenants✓ Correct
CThe landlord to lease the building for 100 years
DA property manager to act as the building owner
Explanation
A master lease is an agreement where one party (master tenant) leases an entire property from the owner, taking on all landlord responsibilities, then subleases individual units to end users. This is sometimes used in real estate investment strategies to control property without owning it.
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Key Terms to Know
Right of First Refusal
A contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Listing AgreementA 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.
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