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Your lease with a retail tenant probably gives it certain special rights and remedies. For instance, the lease may include a cotenancy clause that lets the tenant abate its rent if you don't replace another tenant—typically, an anchor—when it goes dark. Or it may include an exclusive that lets the tenant sue you for damages or terminate its lease if the exclusive is violated. And it might have a performance kickout right that lets the tenant terminate it...
Most shopping center owners provide off-site traffic improvements—such as special signage and lighting in areas leading to the center—to their tenants. These improvements benefit both owners and tenants because they help increase customer traffic, which means more sales at the center. And these improvements may also help control the flow of vehicles into and out of the center, reducing the risk of accidents.
If the lease with your strip mall or shopping center tenant doesn't include provisions allowing you to control its right to choose and change its trade name, you are giving it the power to cause serious problems. At the very least, a tenant's illegal or unsuitable use of a trade name may give your center a bad reputation. In the worst-case scenario, it could result in a lawsuit if the tenant's competitor claims that the trade name was stolen from it and beli...
In today's market, more tenants are leaving their leases early if their businesses are in trouble. Consequently, owners that are left in the lurch with broken lease agreements and a sudden loss of rental income must be prepared to quickly turn over tenants to fill vacant space. Creating “universal space,” which is all purpose and, therefore, easier to re-rent immediately, is a solution that saves time and money.
When a commercial tenant stays in its space after its lease term expires, it becomes a “holdover” tenant. The most common reason for a holdover is the tenant's inability to move because its new space isn't ready yet. As a result of a tenant's mismanaging its relocation, a lengthy holdover situation can become a very complicated and costly trap for the owner. Avoid this trap by discouraging tenants from holding over: Include a costly and inconveni...
With the summer approaching fast, power outages can be a daily occurrence. If the power in your area is shut off, tenants with an axe to grind might try to sue you for any resulting damage to its equipment and business. Or the tenant could argue that it has been “constructively evicted—that is, the power outage in its space was tantamount to an eviction by you—and try to terminate the lease or demand a rent abatement, says Sacramento attorney Thomas F....
Given the precarious credit situation of many tenants today, it is more important than ever that a tenant's security deposit be as secure as possible and immunized from the consequences of a tenant bankruptcy. There are several techniques owners can use to accomplish this, but a novel method—using the security deposit to secure the guaranty of the lease—reduces many risks and administrative burdens.
Bounced rent checks are a major hassle. Your bank will charge you a fee for a bounced check, and then you will have to spend more time actually collecting the rent from the tenant. Also, by the time you redeposit the bounced check or get a new one from the tenant, the rent is way overdue.
Standard lease remedies often are no help, and it may not be in your best interests to use harsher remedies like terminating the lease and evicting a tenant. And collecting damag...
Franchisor tenants in today's market are demanding that their leases give them ample freedom to sublet or assign to any franchisee they choose without your prior consent. Franchisors make this demand because they don't want you putting any limitations on which franchisees they can do business with.
Time was, commercial property owners weren't terribly concerned about which bank issued the letter of credit securing its tenant's obligations under a lease. Banks were assumed to be solvent and well capitalized.
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