Plugging Loopholes

RSS

Granting rent concessions and abatements (which we’ll refer to collectively as “abatements”) has become standard operating procedure in these troubled times. But before you engage in the practice, check your lease for a loophole that can limit how much of a rent increase you can command later.

The Question: Does your lease provide for future rent increases based on the Consumer Price Index (CPI)? If so, you could end up getting b...

Litigation is a big hassle, and when you resort to it you want to be sure you collect as much as possible from tenants who have left the space and are no longer paying rent. But your lease may have a loophole that defaulting tenants can rely on to get a court to reduce or even eliminate their debt.

The nice thing about lease assignments is that you can always go after the original tenant if the assignee violates its lease obligations. At least that’s the common assumption. But if you modify the lease after the assignment, you could end up inadvertently losing your right to hold the original tenant responsible for the assignee’s lease violations. Here’s what you can do to plug this loophole.

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.