Plugging Loopholes

Keep Guarantor Liable for Tenant’s Renewal and Holdover Defaults

August 29, 2022    

In many states, the lease guaranty ends when the underlying lease ends. So, unless there’s language to the contrary, the guarantor is off the hook if the tenant holds over after the end of the term or renews the lease. That leaves you holding the bag for any tenant defaults that occur...

Get Proof of Partnership/Corporation's Authority to Sign Lease

December 22, 2021    

Before signing a lease with a partnership or corporation, get proof that the business is a valid legal entity and that it’s taken the necessary partnership or corporate action to allow it to enter the lease. Otherwise, you may have a hard time enforcing the lease. The risk: If the...

Make Tenants Who Leave Space Unrentable Pay Consequential Damages

October 21, 2021    

It happens to countless landlords, and sooner or later, it’s bound to happen to you. A tenant moves out at the end of the lease. You take possession of the property and discover that it’s in a totally unrentable condition.

The good news is that your lease probably requires the...

Don't Inadvertently Give Defaulting Tenant an Option to Buy

August 24, 2021    

The last thing any landlord wants is to allow a tenant to purchase the property while it’s in default. Unfortunately, that’s exactly what you might have to do if the purchase option clause in your lease contains a common loophole.  

Are Landlords Liable for Criminal Attacks on a Tenant’s Employees?

July 21, 2021    

One reason general liability insurance is so expensive is that landlords can be sued for money damages if an individual gets injured on their property. While there are lots of legal theories trial lawyers can rely on, the vast majority of personal injury cases against landlords involve one or...

Keep Guarantors on the Hook for Attorney’s Fees

June 17, 2021    

Guaranty agreements may cap how much the guarantor has to pay if the tenant defaults. For example, the agreement may say that $100,000 is the most the landlord can collect from the guarantor. If you include dollar caps in your own lease guaranties, just be sure that they exclude attorney’s...

Don't Let Rent Abatements Reduce Future CPI-Based Rent Increases

May 19, 2021    

Granting rent concessions and abatements (which we’ll refer to collectively as “abatements”) has become standard operating procedure in these troubled times. But before you engage in the practice, check your lease for a loophole that can limit how much of a rent increase you...

Require Tenant Notice of Default to Avoid Surprise Claims in Court

January 22, 2021    

Litigation is a big hassle, and when you resort to it you want to be sure you collect as much as possible from tenants who have left the space and are no longer paying rent. But your lease may have a loophole that defaulting tenants can rely on to get a court to reduce or even...

Ensure Post-Assignment Lease Changes Don’t Let Original Tenant Off the Hook

March 17, 2020    

The nice thing about lease assignments is that you can always go after the original tenant if the assignee violates its lease obligations. At least that’s the common assumption. But if you modify the lease after the assignment, you could end up inadvertently losing your right to hold the...

Get Right to Remove Tenants’ Signs Temporarily During Construction Work

November 21, 2019    

Disputes are apt to arise when temporarily covering or removing a tenant’s storefront sign becomes necessary for the landlord to carry out building work. Tenants have an obvious interest in keeping their signage clear, visible, and unobstructed by scaffolding and such, especially during...

Keep Tenants from Introducing Topless Entertainment

October 28, 2019    

One thing to look out for when leasing to bars, restaurants, nightclubs, and other entertainment establishments is unanticipated—and unwanted—use changes after the business opens. Such changes may include the introduction of topless dancing. Needless to say, this is the kind of thing...

Standard Entry Clause May Not Give You Right to Inspect Space

July 23, 2019    

Landlord shall have the right to enter tenant’s space at any time to examine the same, and to make repairs, replacements, and improvements [emphasis added].