Dos & Don'ts

Don't Charge Tenants for Electricity 'Consumed'

May 20, 2019    

If your lease requires tenants to pay you their share of the property/facility’s electric bill, don’t say they have to pay for the electricity they “consume.” That’s because the bills you receive from the electric company may include elements not related to...

Specify Tenant’s Alleged Lease Violations in Eviction Notice

May 20, 2019    

Make sure your eviction notices (a.k.a. notices to quit) specify exactly which duty and section of the lease the tenant violated. Otherwise the notice may be too vague and you won’t be able to get a court to evict the tenant no matter what it allegedly did wrong.

Don't Forget Beneficial Transportation in Operating Expenses

February 12, 2019    

If you’re the owner of a large retail property or several properties, you might decide to capitalize on the convenience factor and provide transportation for shoppers. While maximizing sales benefits you in the form of higher percentage rent and maintaining cotenancy obligations by...

Don't Accept Ambiguous Definition of 'Merchandise' in Use Clause

February 12, 2019    

An increasing number of retailers sell both new and “vintage” or consigned merchandise. But if you want a retail tenant’s space to be used solely or primarily for sales of new merchandise, then you’ll need to say this in the lease’s use clause. And be aware that...

Require Tenant to Offer Same Deal as Third Party for ROFR

February 12, 2019    

Some owners offer a tenant the right of first refusal (ROFR) to buy a building, should they decide to sell the property. If you decide to do this, make sure that you don’t get burned by the current tenant’s lower offer than a third party. When negotiating a lease with a tenant you...

Negotiate Hazardous Materials Cleanup with Medical Tenant

February 12, 2019    

Medical office tenants may pose environmental and safety risks if they generate hazardous materials and medical waste. Contamination of space can be a nightmare for you, but you can ameliorate this by requiring the tenant to return the space in the same condition that it was in when the tenant...

Check Conflicts of Interest Before Offering Deal Details

August 30, 2018    

Before retaining a real estate attorney for a new deal, don’t spend time and money disclosing the deal’s details to her before you are sure that no conflict of interest exists that could prevent her from fairly representing your interests. This applies whether the attorney is new to...

Don't Include Stairs in Tenant's Square Footage

August 30, 2018    

If your commercial property has more than one level, it will have at least one set of stairs. You may be wondering if you could include the stairs leading to, say, the dance studio in the square footage, and whether it’s customary, or even legal, to include stairs leading to a second-story...

Capture Gross Sales from All Tenants That Fill Specific Space

August 15, 2018    

Gross sales clauses can be very lucrative for owners because they aren’t limited to collecting just base rent—the percentage of sales a tenant must hand over could potentially be more than its actual rent. But a problem crops up for you when other tenants use the named tenant’s...

Don't Let Tenant Use Space for Non-Sales Purposes

August 15, 2018    

So much retail business is done online that it’s common for tenants that are pulling in profits that way to use their brick-and-mortar spaces for purposes related to the business, but not to actually sell products. For example, a tenant with a successful website might turn its store into a...

Collect Sales Owed from Retail Kiosks

August 15, 2018    

If you grant a license to kiosks and carts to conduct business at your center, make sure that you audit the books and records of a set percentage of those kiosks and carts each year to verify their gross sales. It’s not uncommon for kiosks and carts to submit gross sales statements that...

Negotiate Extension for Delivery of Space

June 20, 2018    

One thing that owners don’t like to hear when negotiating a lease is that the tenant must have possession of the space by some important date, known as the “drop-dead date.” This is an issue because the tenant usually wants the owner to suffer stiff consequences if the drop-...