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Disasters have always affected commercial owners who must deal with property damage caused by snowstorms, hurricanes, fires, and floods. Passing disaster-related expenses through to tenants in common area maintenance (CAM) charges can lower your repair bills and boost your bottom line after your shopping center or office building has been damaged. Negotiate with your tenant to obligate it to pay for at least some of the cost of rehabilitating your property.

Facts: An employee of an office building tenant suffered injuries after she tripped and fell on a raised edge of the metal molding surrounding a trapdoor on the floor of the tenant's pantry room. The purpose of the trapdoor was to access a crawl space approximately three feet high that lies beneath the pantry room floor. The employee sued the owner for negligence and New York Health Code violations. She asked the court for a judgment in her favor without a tr...

Facts: A career center tenant signed a lease with the owner of an office building to rent space in four office suites for an initial term of 124 months. The building was sold, and the tenant and new owner extended the lease. The owner later claimed that the tenant had defaulted on its lease, and it sued the tenant to recover the space. The tenant claimed that the owner could not evict it from the four suites, because it hadn't delivered two notices properly a...

High-risk tenants, such as liquor and gun stores, pose potential dangers that typical retail businesses don't. But because alcohol and guns are available at limited locations, these high-risk tenants have a captive audience of customers that create a steady income stream, lessening the chances that they will default on rent or move out before the end of their lease terms.

Although the commercial real estate market is steadily improving, tenants still are negotiating aggressively for lease terms that they otherwise wouldn't have been able to get before the downturn. During that time, most national tenants—whether or not they were struggling—asked their owners for rent abatements. But some tenants with a lot of clout asked for either a profit-sharing or a percentage ownership agreement—rights that can be much more luc...

If you've signed a “governing document” with the owner of an adjoining shopping center or the tenant of a freestanding building at your center, you've agreed to be subject to certain restrictions. A governing document—which can be an operation and easement agreement (OEA), a reciprocal easement agreement (REA), or a declaration of covenants, conditions, and restrictions (CC&Rs)—dictates how issues like parking, signage, construction, ...

You signed a lease with a tenant who agreed to use its space for a specific purpose. When you find out that the tenant sublet the space, and that the subtenant is using it for a completely different purpose than you and the tenant had agreed upon, you realize that your lease's use clause wasn't as strong as you thought. Or you could discover that one of your tenants that hasn't sublet its space is using it improperly itself.

Commercial owners have much to learn from the case law issued by U.S. federal and state courts over the past year. The biggest challenge for owners seems to be drafting clear lease language, which can protect them from lawsuits filed by tenants arguing that they have rights the owner didn't intend to give them. If your lease provisions are ambiguous—failing to clearly define your and your tenant's rights and obligations—a court could interpret the le...

Renting to a tenant on a percentage rent basis can be rewarding if the tenant operates a profitable business—and accurately reports its gross sales. The higher the profit, the higher the amount you can collect from the tenant. But if the tenant underreports its sales, you'll get paid less than you are entitled to under the lease.

If one of your tenants has defaulted on its lease or damaged its space, you know the importance of having both a security deposit amount large enough to cover expensive problems and a clause in the lease that will protect you from having to spend your own money rectifying them. But be prepared for a tough negotiation—especially in this economy, when many tenants have a hard time coming up with the cash for a deposit and fear that they will lose it if they h...