Plugging Loopholes

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Disputes are apt to arise when temporarily covering or removing a tenant’s storefront sign becomes necessary for the landlord to carry out building work. Tenants have an obvious interest in keeping their signage clear, visible, and unobstructed by scaffolding and such, especially during business hours. But landlords have an equally legitimate need to do what must be done to make necessary repairs, renovations, and improvements. The good news is that you can reconc...

One thing to look out for when leasing to bars, restaurants, nightclubs, and other entertainment establishments is unanticipated—and unwanted—use changes after the business opens. Such changes may include the introduction of topless dancing. Needless to say, this is the kind of thing that can raise a firestorm of objections from not only other tenants, but also local residents and government authorities. So, you want to make sure your lease protects you in c...

Landlord shall have the right to enter tenant’s space at any time to examine the same, and to make repairs, replacements, and improvements [emphasis added].

By Sujata Yalamanchili, Esq. and Elizabeth A. Holden, Esq.

Co-working spaces look like cool, hip, innovative spaces, so you may have wondered if you can do your job in one of those spaces. Could a law firm or just an individual attorney sit at a table for a day, type away, and drink the free coffee or beer?

When you negotiate a lease with a tenant, you and your attorney try to cover all your bases—drafting provisions that protect you in every conceivable circumstance under which the tenant would breach the lease during the lease term. However, one situation isn’t as common as other types of breaches, so you might forget to include language to cover it.

During the economic downturn several years ago, contraction options—which let tenants give back part of their space during their leases and pay a lower rent—became popular because downsizing was one way for tenants in trouble to scale back costs. But two now-common commercial real estate trends have made the contraction option desirable for tenants that aren’t in financial trouble.

Unfortunately, fires, floods, and other casualties can happen at the shopping center or office building you own. If you’ve signed typical leases with your tenants, they probably place some limits on your restoration obligations. But after a casualty, it may not be cost effective or practical for you to restore the tenant’s space or your building or center.

Tenants who have a high electricity consumption can pose problems that you might not have considered when negotiating your leases. And a tenant that uses a typical amount of electricity now could need more later, or sublet or assign its lease to a high-power tenant. So, the message should be in neon lights for you: It’s crucial to negotiate and draft your lease provisions to protect against a tenant’s high power consumption.

Continuing advances in technology have made it easier than ever for commercial real estate owners to have the most effective security equipment for their properties. But upgrading and increasing security measures is expensive. And although the right security plan can save you money from vandalism, theft, or liability for accidents or crimes, it also has the potential to blow your budget. You can pass through to tenants the costs of increased security measures, though. H...

Performing due diligence on a prospective tenant is one way to try to determine whether the tenant is financially viable. But what if you end up leasing to a tenant that proves to be a risk, no matter how careful you thought you were when researching it? One example of a risky tenant is one that’s merely a “shell” company—that is, a company that serves as a vehicle for business transactions without itself having any significant assets or operations.