Before you read
Test yourself first: 5 questions
Question 1 of 5
A property insurance policy that contains a coinsurance clause typically requires the owner to insure the building for at least a specified percentage of its replacement value, commonly:
Answer: C. Coinsurance clauses commonly require coverage of at least 80% of replacement cost; if the owner under-insures, the insurer pays only a proportionate share of a partial loss.
Question 2 of 5
A buyer purchases a 1972 home. The sales contract lacked the lead-based paint disclosure and EPA pamphlet. What is the legal consequence?
Answer: C. Pre-1978 housing requires the federal lead disclosure package. Violations bring federal fines (per violation) and civil exposure — including treble damages in knowing violations. Actual presence of lead isn't the trigger; the missing disclosure is.
Question 3 of 5
Knowingly stating a false material fact to induce a sale is:
Answer: A. Fraud is an intentional false statement of material fact; negligent misrepresentation is a careless one; puffing is mere opinion.
Question 4 of 5
A buyer purchases land not knowing it was previously used for chemical dumping. Which CERCLA defense might protect this buyer from cleanup liability?
Answer: B. CERCLA's innocent landowner defense can shield a buyer who, after appropriate inquiry (due diligence), neither knew nor had reason to know of the contamination at the time of purchase.
Question 5 of 5
A buyer who has NOT signed a buyer-agency agreement begins discussing their maximum offer with the listing agent at an open house. The listing agent should:
Answer: B. The listing agent represents the seller and must disclose that agency relationship so the buyer does not unknowingly reveal confidential information to the seller's representative.
Keep the streak going with more questions like these, each with a full rationale.
What you need to know
USE clauses limit what the tenant may do; EXCLUSIVE-use clauses promise a retail tenant no in-center competitor. NONDISTURBANCE, SUBORDINATION & ATTORNMENT (SNDA) agreements sort out what happens when the property is financed or foreclosed: the lease subordinates to the mortgage, the lender agrees not to disturb a performing tenant, and the tenant agrees to recognize the new owner. HOLDOVER clauses set (often punitive) rent for staying past the term. RENEWAL options and rights of first offer/refusal give tenants future flexibility — all of it negotiated up front, none of it implied.
Lease Clauses Worth Knowing: FAQs
Is Lease Clauses Worth Knowing on the real estate exam?
Yes. Leasing & Property Management is a scored domain on the real estate licensing exam, and this topic appears in the national portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
