Leasing License Practice Exam

What typically occurs when a lease is in effect at the time of property conversion?

1. The lease is automatically renewed

2. The lease must be enforced until expiration

3. The lease becomes void immediately

4. The tenant gains a right of first refusal

The correct answer is: The lease must be enforced until expiration

When a lease is in effect during a property conversion, it remains binding until its expiration. This means that the landlord must continue to honor the terms of the lease as agreed upon by both parties. The lease typically retains its legal standing despite any changes in property ownership or the nature of the property. The continuity of the lease is essential to protect tenants' rights, ensuring that they can reside in the property and have the benefits agreed upon in the lease until the term ends. This provision safeguards tenants from being evicted or having their lease nullified simply due to a change in property usage or ownership. Other options may suggest scenarios that do not align with standard leasing practices during a conversion. The automatic renewal of the lease is not necessarily guaranteed unless explicitly stated in the lease agreement. A lease becoming void immediately would undermine the stability and predictability that leases are meant to provide. Lastly, the right of first refusal typically pertains to an option for tenants to purchase the property before it's offered to others, which does not automatically arise from a lease remaining in effect.