Traps to Avoid

Agreeing to Agree Isn’t Enough to Lock in a Lease Renewal

June 6, 2019    
It’s hard to determine today how much rent to charge a tenant for a lease renewal (or extension) that won’t happen until years later. It may be tempting to skirt this problem by providing for the renewal at an unspecified rent “to be negotiated” or “agreed to” in...
Owner Loses

Restaurant Claims Lack of Parking Ends Its Duty to Pay Rent

June 6, 2019    
What Happened: A tenant wanting to open a new restaurant in Dallas expressed concern about the lack of nearby offsite parking but signed the lease anyway. The landlord set out to find more parking but was unsuccessful. As a result, the tenant decided it couldn’t go through with its restaurant...
Owner Loses

Renewal Reminder = Waiver of Landlord's Right to Renewal Notice

June 6, 2019    
What Happened: A landlord sent an email to a restaurant tenant with the following message: Reminder of increase and renewal I just wanted to remind you that your first five-year lease agreement comes to an end on November 30, 2015. Please confirm that you want to continue with the lease. There is...
Owner Loses

'As Is' Clause Doesn’t Excuse Failure to Provide Accurate Information about Property

June 6, 2019    
What Happened: Tenants leased space in a Long Beach, Calif., shopping mall for use as a live music and entertainment venue. But when they opened their doors, they got lambasted with noise complaints from other tenants. Turn down the volume or change your business, the landlord demanded. The tenants...
Feature

Limit Your Duty to Re-Let After Tenant Defaults

May 20, 2019    
Consider this situation: With three years remaining on its lease, a commercial tenant decides to pull up stakes, vacate the premises, and stop paying rent. The landlord makes no effort to re-let the space and allows it to remain vacant through the end of the lease term. It then sues the tenant for...
Traps to Avoid

Don't Assume Anticipatory Breach Just Because Tenant Vacates

May 20, 2019    
The rule of “anticipatory breach” gives you the right to take immediate legal action against tenants that no longer intend to fulfill their remaining obligations under the lease. The catch: The tenant must make it crystal clear, whether by words or by actions, of its intent to bail on...
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 consumption...
Dos & Don'ts

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.
Owner Wins

Not Carrying Required Insurance Is Uncurable Violation

May 20, 2019    
What Happened: A landlord sued to evict a spa tenant for violating its lease obligation to maintain a general liability insurance policy. The spa acknowledged the violation but asked the court to toss the lawsuit because the landlord never gave it the formal notice and opportunity to cure required...
Owner Wins

Failure to Complete Improvements Is Grounds for Eviction

May 20, 2019    
What Happened: On Jan. 6, an airport authority assigned a lease to a hotel tenant requiring the latter to install a full-service bar, swimming pool, and other improvements and operate under a nationally recognized chain brand name by Dec. 31. But the hotel met neither obligation and the authority...