Feature, Drafting Tips, In the News, Plugging Loopholes, Resolving Disputes, Negotiating Tips, Q & A, Dos & Don'ts

Avoid 4 Costly Pitfalls When Allocating Lease Insurance Duties

November 29, 2022    

One of the few positives to emerge from the pandemic for commercial leasing was how it got landlords and tenants to set aside historical mistrust and work together for their mutual welfare and survival. While the pressing issue at the height of the COVID-19 crisis was restructuring rent...

Get 5 Key Protections When Transferring Construction Warranties to Tenants

November 29, 2022    

It’s a common scenario that’s likely to arise any time a landlord hires outside contractors to carry out substantial improvements on a tenant’s premises: The tenant requests that the landlord “transfer” any construction warranties that the tradespeople may have...

Cut Losses on Office Tenants' Early Lease Termination

October 24, 2022    

Working from home and other post-COVID business realities have made many office tenants reluctant to sign a long-term lease. One way to overcome this is by offering tenants the option to terminate the lease early if the rent becomes unaffordable or the space becomes unnecessary. But while...

Get 7 Lease Protections When Making Tenant Responsible for HVAC Maintenance

September 23, 2022    

It costs a lot of money to maintain a heating, ventilating, and air conditioning (HVAC) system. There’s also a lot at stake. Keeping the HVAC system humming is crucial to maintaining comfort, ensuring air quality, and, in some cases, preserving tenants’ stored inventory. Accordingly...

How to Deal with Retail Tenant's Demand to Exclude Bad Debts from Gross Sales

September 23, 2022    

When negotiating a percentage rent lease, don’t be surprised if a retail tenant demands that you exclude bad debts from the formula for calculating gross sales. This is hardly an unreasonable demand. After all, why should the tenant have to pay percentage rent on customer receivables that...

Get 12 Lease Protections When Allowing Tenants to Keep Pets at Your Property

August 29, 2022    

Pet rules in a commercial lease? At first, I thought this was a terrible idea for an article. After all, the vast majority of commercial landlords in the U.S. don’t permit pets on the property—to the extent they even consider the issue at all. And it was for that very reason...

Ensure Percentage Rent Flow When Tenant Assigns or Sublets

August 29, 2022    

Percentage rent is typically based on the gross sales generated from the leased space rather than a tenant’s gross sales. So, an assignment or sublet by a tenant with strong sales to a business with weaker sales could take a significant bite out of percentage rent. You could even end up...

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...

How to Negotiate and Structure a Workout with Tenants in Default

July 20, 2022    

With a recession looming, commercial landlords and tenants may once again need to exhibit the flexibility they displayed to get through the COVID-19 pandemic. While helping tenants meet their rent obligations will be the first-choice approach, landlords also need to be prepared in case tenants...

Lease Guaranty vs. Suretyship: What's the Difference & Why It Matters

July 20, 2022    

There are some tenants that you know will have the assets necessary to pay their rent every month. And then there are the more financially risky ones. When leasing to these businesses, it’s advisable to get a more financially stable third party to sign an agreement backing the tenant...

Get 10 Legal Protections When Giving Tenants a Right of First Offer

June 23, 2022    

Offering ROFOs is a great way to attract flourishing businesses. But it comes at a price.

 

Moving to a different building can be costly and disruptive. Accordingly, tenants that are growing rapidly may seek rights to expand within the building in case they run out of space...

Don't Use 'To Code' as Sole Work Letter Standard

June 23, 2022    

When negotiating the terms of a work letter with a tenant, don’t just agree to do a particular item of work “to code,” without listing any specifics or limitations. When not properly defined or limited, the phrase “to code” can be the source of confusion,...