What clause ensures that the landlord's lender cannot terminate the lease as long as the tenant fulfills obligations?

Prepare for the New York Real Estate Salesperson Test with interactive multiple choice questions and detailed explanations on each topic. Study effectively and pass your exam with confidence!

The nondisturbance clause is a critical component in lease agreements as it protects the tenant's rights in the event of a sale or foreclosure of the property. This clause essentially ensures that if the landlord's lender steps in due to default on the loan, the tenant's lease will remain intact and cannot be terminated as long as the tenant adheres to the terms stipulated in the lease.

This provides stability for tenants, allowing them to continue operating without interruption, which is particularly vital for businesses that rely on their premises to function. The nondisturbance clause is negotiated typically alongside an attornment clause, where the tenant agrees to acknowledge the lender as the new landlord under the existing lease if the property is taken over due to the landlord’s default.

In contrast, the other options do not serve the same purpose. A termination clause would allow either party to end the lease under specified conditions, while a use clause defines what activities can be conducted on the leased premises. An exclusive use clause, on the other hand, ensures that no other tenants can operate a similar business on the same property, which does not address the concern of lease termination in relation to the landlord's lender.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy