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Commercial leases typically require tenants to refrain from creating nuisances that interfere with other tenants’ use and enjoyment of their property. The problem is that “nuisance” is often in the eye of the beholder. While they might not technically constitute a nuisance under the lease, the noises, smells, vibrations, and other emanations that are normal for a particular tenant’s bus...
Like many landlords, your lease may contain a tax escalation clause requiring the tenant to pay its share of any real estate tax increases that occur during the lease term. These increases are often measured off a base year, typically the first year of the lease. However, pegging future tax increase payments to the original base year tax could end up costing you a fortune if you later manage to get that tax assessment reduced.
Grudges are part of any personal or business relationships. It’s a lesson that most landlords learn when tenants bring or threaten lawsuits over old grievances in a bid to get out of their lease, stall an eviction, or otherwise increase their leverage over you in a current dispute. Defending yourself against ancient claims isn’t easy. Memories fade, witnesses disappear, and documents vanish into oblivion. That’s why you should give serious thought to l...
Unlike so many other aspects of the commercial leasing business, methods of paying rent haven’t changed all that much over the years. The majority of tenants still mail out their monthly checks to the landlord. However, a growing number of businesses prefer to remit their rent electronically using ACH or wire transfer. Agreeing to electronic transfer of rent can be a win-win, provided that you get the right lease protections, advises a seasoned New York City leasi...
In these hard economic times in which so many businesses are being forced to shut down, it’s not unusual for commercial tenants to vacate their leased space without warning and leave all of their personal property and furnishings behind. In addition to losing a tenancy, landlords then face the expense of removing the property and preparing the space for the next tenant. However, it doesn’t necessarily have to be this way. As the saying goes, one person&rsquo...
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 given the landlord. The idea behind the request is to ensure that the tenant can call upon the tradespersons who performed the work for the landlord to resolve any defect, substandar...
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 collecting only minimum rent if the assignee or subtenant’s gross sales fall below the percentage rent breakpoint.
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’s lease obligations and allowing you to hold it liable in case the tenant defaults. In the business vernacular, such agreements are generally lumped together under the term &ldq...
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