Ontario Real Estate Licensing Exam Practice · Question
A prospective tenant, ABC Corp., is negotiating a lease for 5,000 square feet of office space in downtown Toronto. The landlord is offering a 'Net Lease' at $30.00 per square foot. The projected additional costs for operating expenses, property taxes, and building insurance are $15.00 per square foot. What will be ABC Corp.'s total annual lease payment under this Net Lease agreement?
In a Net Lease, the tenant pays a base rent plus a pro-rata share of specified operating expenses (taxes, insurance, maintenance). The total annual payment will
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Question: A prospective tenant, ABC Corp., is negotiating a lease for 5,000 square feet of office space in downtown Toronto. The landlord is offering a 'Net Lease' at $30.00 per square foot. The projected additional costs for operating expenses, property taxes, and building insurance are $15.00 per square foot. What will be ABC Corp.'s total annual lease payment under this Net Lease agreement?
Answer options:
- $150,000
- $75,000 ✅ $225,000
- $45,000
Correct answer: $225,000
Explanation: In a Net Lease, the tenant pays a base rent plus a pro-rata share of specified operating expenses (taxes, insurance, maintenance). The total annual payment will be ($30.00 + $15.00) * 5,000 sq ft = $225,000.
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