Drafting Tips

License v. Lease: When to Use a License Rather Than a Lease

August 10, 2016    

CRE owners should be aware of situations in which a license agreement may prove to be more beneficial than a leasehold interest. The key factors that distinguish a license from a lease are the ability to revoke the licensees’ use at will, and the degree of control that the property owner...

Rent Acceleration Clauses: Discount to Present Value

August 10, 2016    

Rent acceleration clauses in commercial real estate leases are often the subject of contentious negotiations between the parties, and increasingly, the subject of review by courts when enforcement is challenged by tenants and guarantors.

Rent acceleration clauses protect the owner by...

Specify That Tenant's Additional TIA Won't Be Abated

July 25, 2016    

In a strong tenants’ market, you might find yourself fighting for good tenants that help the synergy at your center or serve as a destination spot that will draw and keep foot traffic. You may be forced to offer incentives, like a tenant improvement allowance (TIA) that’s bigger than...

'Deem' the Square Footage Numbers in Your Lease

February 23, 2016    

Ideally, you’ll want to keep square footage and dimensions out of your lease or attached floor plan because those numbers can easily become the focus of a dispute. But you may have to include square footage or dimensions in certain circumstances—for example, if you’re dealing...

Specify Which Alterations Tenant Can Make Without Your Consent

December 21, 2015    

Many tenants need major improvements made in their space in order to accommodate their businesses. Franchisee tenants need space that looks a certain way, retail clothing stores need shelving, and restaurants might need built-in seating. This will probably be spelled out in the tenant...

Spell Out When and How You'll Refurbish Tenant's Office Space

September 17, 2015    

Office building tenants with long lease terms may be concerned that their office space will begin to look shabby in the future. These tenants argue that the rent they’ll be paying in the last few years of the lease won’t reflect the reality of wear and tear like peeling paint and...

Draft Assignment Clause that Anticipates M&A Trends

May 27, 2015    

Commercial real estate lease assignments might seem straightforward for both office and retail space: A tenant that wishes to leave its space finds another tenant willing to take over the space and the original tenant’s lease. And, typically, the lease’s assignment clause will...

Draft Nonwaiver Provision to Collect Partial Rent After Eviction Notice

September 29, 2014    

If you have a tenant that fails to pay its rent, you may decide to send it an eviction notice so that you can kick it out of its space—and even start the eviction proceeding. But if the tenant pays you some—but not all—of its overdue rent after getting your eviction notice (and...

Limit Pre-Lease Inspection Right

June 25, 2014    

A prospective tenant that’s negotiating to lease an entire building or a large space may want to inspect the condition of the space or the underlying property before signing the lease. For example, it might want to do environmental testing or have an engineer or contractor check the...

Set Short Initial Term, Longer Renewal to Entice Small Retail Tenants

April 30, 2014    

Despite an upturn in the economy in many areas across the country, many shopping center owners, especially in areas that are still depressed, are desperate to fill vacancies at their centers. Prospective retail tenants, particularly small retailers, may be hesitant about going into centers...

Get Right to Sublet or Assignment Profit

April 10, 2014    

It’s common for a lease to give an owner a share of any profit a tenant makes if it sublets or assigns its lease. But if you don’t specify this in your lease with the tenant you’ll miss out on this opportunity. And even if you do specify this in the lease, you still need to...

Avoid Ambiguity in Insurance Policy Requirements

January 28, 2014    

It’s crucial that your tenants are adequately insured. To make sure of this, your leases may list by name the insurance coverage that the tenants must get and maintain. If you think you’re covering all your bases by writing this into the lease in such a specific way, you could...

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