Plugging Loopholes

Don't Let Tenant's Rent Abatement Apply to Additional TIA

February 1, 2009    

Many tenants these days demand a tenant improvement allowance (TIA) that is substantially bigger than what you want to give. For example, you may want to give the tenant a $30-per-square-foot TIA, but the tenant demands $45 per square foot. If the tenant has good credit, you may give in and loan...

Condition Rent Break on Including Off-Site Sales in Percentage Rent Calculation

January 1, 2009    

You might agree to give your retail tenant a rent concession—such as below-market minimum rent—to persuade it to sign your lease. And in return for the concession, you would expect the tenant to pay you a lot of percentage rent if its business takes off.

Make Sure Subtenant Waives Its Right to Jury Trial

September 25, 2008    

If you and a tenant wind up in court, it's usually to the tenant's advantage to have a jury—not a judge—decide the dispute. That's because juries are typically biased against the owner. Therefore, if your lease is like most, you've included a protective clause that...

Make Tenant Acknowledge Independent Investigation

September 8, 2008    

Before signing a lease with you, a savvy prospective retail tenant may independently investigate your center's business operations, rather than relying solely on what you say about them. Therefore, the tenant should have only itself to blame if its store fails.

Require Tenant to Maintain Elements of Space that Aren't Clearly Interior or Exterior

September 7, 2008    

Your lease may make a tenant responsible for doing all interior maintenance work at its space, while you're responsible for doing all exterior maintenance work. Although you may think that distinguishing between the interior and exterior of the tenant's space is a snap, think again....

Require Tenant to Pay for All of Its Parking Spaces, Even Unused Ones

September 7, 2008    

You may agree to give a tenant the right to use a set number of parking spaces at your building or center in return for a parking fee. But if your lease is like many we've seen, it may have a loophole that could result in a tenant paying you far less in parking fees than you expected. Here...

End Security Deposit Concession for Undeserving Tenant

March 1, 2008    

To entice a desirable tenant to sign your lease, you may be forced to give it a security deposit concession. The concession may be to forgo a deposit altogether or to have the tenant put up less money than you'd typically require in a stronger leasing market. Either way, a security deposit...