Drafting Tips

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Despite an upturn in the economy in many areas across the country, many shopping center owners, especially in areas that are still depressed, are desperate to fill vacancies at their centers. Prospective retail tenants, particularly small retailers, may be hesitant about going into centers—especially if they have to commit to a long-term lease—because they’re worried that their businesses may fail. They may have to downsize, change their retail strateg...

It’s common for a lease to give an owner a share of any profit a tenant makes if it sublets or assigns its lease. But if you don’t specify this in your lease with the tenant you’ll miss out on this opportunity. And even if you do specify this in the lease, you still need to stay on top of the situation. Just because a tenant is required to share a profit doesn’t mean it will come forward and volunteer to do so.

It’s crucial that your tenants are adequately insured. To make sure of this, your leases may list by name the insurance coverage that the tenants must get and maintain. If you think you’re covering all your bases by writing this into the lease in such a specific way, you could actually end up boxing yourself in.

As a retail property owner, you’ve certainly spent time considering the tenant synergy—that is, stores functioning together to draw shoppers that a center normally wouldn’t capture without them as a group—that will maximize profits. That’s why the use clause in your leases with tenants is so important; it requires them to use their space in the way that you’ve determined is the best for your center, and prevents them from using the sp...

A creditworthy tenant dealing with an overly cautious lender may be confident that its financing will go through, but won’t want to wait until the deal is complete before it signs the lease. Don’t be surprised if the tenant asks you to give it early access to its space, so that its opening isn’t delayed. This may seem harmless, especially if it’s a good tenant and you’re afraid it’ll go elsewhere if it can’t set up shop pre-lease.

Rent abatement clauses spell out the circumstances under which tenants are entitled to withhold rent. But if you don't draft them carefully, you may overlook specific items that can affect you later if the tenant exercises its right. Here are four Dos and Don'ts to follow to avoid omitting commonly overlooked details. Ask your attorney about including the provisions below in the rent abatement clause in your lease.

Your lease will specify under what circumstances you and the tenant may terminate the lease. It'll also spell out the procedure you must follow to do so—for example, by giving 30, 60, or 90 days' written notice. If the provisions in your lease that govern termination rights are drafted ambiguously, you may be left with a more limited right to get out of the deal than you intended. For example, you might intend to give yourself an ongoing termination right ...

Whether you're negotiating your snow removal contract or approving your tenant's, the contract should:

Identify term of agreement and exact services to be performed. This includes which areas will be plowed; the minimum snow accumulation amount before plowing, sanding/salting, and/or shoveling will begin; if the plowing will begin automatically or only upon request from the owner/manager; the mixture (ratio) of sand to salt; the type of ice melt pro...

Retail real estate experts predict that more, not fewer, national-brand “pop-up” shops will appear in shopping centers this holiday season than during the past few years. Pop-up shops can be a great way to add pizzazz to your center, but only if you protect yourself from common risks that temporary tenants can present.

If you own a shopping center or strip mall, some of your retail tenants will probably ask you to allow them to operate during hours that are the most convenient for their businesses, even though you've set operating hours for the entire center. And you may be tempted to give some tenants, especially those who bring a lot of foot traffic to the center or have a lot of leverage, discretion for setting their own operating hours, instead of operating during the period o...