Plugging Loopholes

Add Protections to Make Tenant's Contraction Option Airtight

July 19, 2018    

During the economic downturn several years ago, contraction options—which let tenants give back part of their space during their leases and pay a lower rent—became popular because downsizing was one way for tenants in trouble to scale back costs. But two now-common commercial real...

Plug Five Loopholes in Damage and Destruction Clause

May 29, 2018    

Unfortunately, fires, floods, and other casualties can happen at the shopping center or office building you own. If you’ve signed typical leases with your tenants, they probably place some limits on your restoration obligations. But after a casualty, it may not be cost effective or...

Add Three Protections to Lease with High Electricity Consumption Tenant

August 24, 2017    

Tenants who have a high electricity consumption can pose problems that you might not have considered when negotiating your leases. And a tenant that uses a typical amount of electricity now could need more later, or sublet or assign its lease to a high-power tenant. So, the message should be in...

Negotiate Authorization to Charge Tenants for Upgraded Security

May 18, 2017    

Continuing advances in technology have made it easier than ever for commercial real estate owners to have the most effective security equipment for their properties. But upgrading and increasing security measures is expensive. And although the right security plan can save you money from...

Use Indemnity Agreement to Ensure Tenant's Viability

April 26, 2017    

Performing due diligence on a prospective tenant is one way to try to determine whether the tenant is financially viable. But what if you end up leasing to a tenant that proves to be a risk, no matter how careful you thought you were when researching it? One example of a risky tenant is one that...

Protect Warranties from Being Voided by Tenant's Self-Help Effort

April 12, 2017    

A strong tenant forces you to give it a self-help right—that’s the right to step into your shoes to do important repair, maintenance, or replacement work if you fail to do that work. But suppose you have warranties on your roof and other items that restrict who can perform repair,...

Ensure Appropriate Signage Removal by Tenant

January 24, 2017    

When a lease ends, you’ll want the tenant to completely remove any interior and exterior signage it has at its space. But that doesn’t always happen. Sometimes the tenant fails to remove some or all of its signage, leaving the job for you. Other times, it removes the signage but...

Don't Get Left on Hook for Costs of Enforcing Illegal Exclusive

October 21, 2016    

The exclusive right to sell a product or provide a service at a shopping center is invaluable to a tenant. The tenant won’t have any direct competition for profits, which sometimes means that it can set prices that would otherwise have to be lower to lure customers away from other...

Don't Rely on Guarantor's Personal Liability as Extra Assurance

August 29, 2016    

If you’re unsure that a prospective tenant will be able to pay its rent, getting a guaranty can assuage your fears and protect you from not being able to collect what the tenant owes. While a tenant might be able to produce a third party who’s willing to act as a guarantor on the...

Don't Let Tenant Ambush You with Default Claims

July 25, 2016    

You might think that if you sue a tenant that has stopped paying rent and abandoned or been evicted from its space, it’s only fair that the tenant pays you what it owes in damages. If you’re surprised to find out that some tenants end up paying only a fraction or even none of the...

Set Criteria When Giving Relocation Space to Tenant

April 18, 2016    

Many retail space owners, and especially mall owners, give themselves a relocation right. That is, the right to relocate the tenant to a different space in the center or mall under certain circumstances. Negotiating a relocation right can be tricky—if you don’t draft this provision...

Don't Miss Opportunity to Collect on Slotting Fees

March 31, 2016    

Many people don’t know that retailers—namely drug stores, grocery stores, discount department stores, home improvement stores, music stores, and book stores—have special deals with manufacturers, vendors, or suppliers to promote certain products. And that might not mean much to...

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