Negotiate Extension for Delivery of Space
Hearing the term “drop-dead date” when negotiating your lease with a tenant is usually stress inducing. That’s because the tenant typically would want you to suffer stiff consequences if the drop-dead date—that is, the date by which the space must be delivered—isn’t met. Free rent, significant monetary penalties, and, sometimes, a termination option are some requests tenants make.
If you agree to a drop-dead date, protect yourself by negotiating that you’re allowed an extension to the trigger date for penalties to begin under three circumstances: (1) force majeure events; (2) reasons outside of your control; and (3) tenant delays. Ask your attorney about using this language in the “delivery of space” provision in your lease:
Model Lease Language
The date of delivery of space to tenant shall be extended, on a day-to-day basis, by the number of days of delay caused as a result of any reason listed below:
i. Any reason outside of Landlord’s reasonable control;
ii. Any Force Majeure Event (as defined in Article [insert #] of the Lease Agreement;
iii. Any Tenant Delay (as defined in the Lease Agreement);
iv. Required inspections, approvals, site visits, or similar items required by third parties, including without limitation the federal, state, or local governments or other boards, committees, or the like with jurisdiction, unless caused by Landlord’s sole negligence; and
v. Change orders, to the extent approved by Landlord in writing.