Online Alerts

RSS

Despite protecting yourself from costly litigation by using an indemnification clause in your leases with tenants and reducing your exposure to personal injury lawsuits by properly maintaining your center or building, you may still be on the hook for an accident, unless you’re immune from liability. Having insurance that will cover the related costs helps soften the blow.

It’s not uncommon for tenants to plan to spend more than you’ve agreed to pay for a tenant improvement allowance (TIA). Owners have a dual goal when providing a TIA: It entices tenants to lease the space and, by being updated, the space is more valuable overall. But generally it takes some time—several weeks to several months—to complete a buildout in a commercial space. Ideally, the tenant would complete its im...

Q: A prospective tenant for my shopping center wants its cotenancy clause to provide that a specific well-known retailer that takes up a large space in the center must be replaced with a “major tenant” if the retailer goes out of business. I assume this means a tenant that’s large enough to fill the entire square footage of the vacant s...

If you’re like most commercial space owners, you’ve included the commonly used “cure period” in your leases, to give tenants some time to fix any lease defaults. This makes it easier for both parties—it gives the tenant, who might not have even been aware of a violation, the opportunity to resolve things without resorting to lease termination or other remedies. But a problem could arise for you if the tena...

While it can be a complicated process to “green a lease” for a tenant that requests environmentally friendly provisions, these agreements can work in your favor, too. Cost savings through energy efficiency, earning valuable credits toward LEED certification, and becoming attractive to green-centric prospective tenants are all major benefits.

Sadly, public violence has escalated in the past few years, with attacks in workplaces, entertainment venues, and malls. That’s why it’s important to give yourself the right to make a tenant buy new insurance or increase its coverage during the lease term to respond to changing circumstances.

Don’t rely on an “implied” continuous operations covenant—that is, one that isn’t expressly stated in the lease—if you want your retail tenant to continuously operate from its space. Some courts might find that one exists anyway in certain situations, such as when the lease requires a long-term tenant to pay a minimal base rent but substantial percentage rent, limits the tenant’s use and abilit...

Negotiating tenant parking requests is a key part of lease deals for most retail tenants. They’ll likely come to the table with requests, and your goal should be to work with the tenant to come up with parking provisions that help their businesses, without compromising your ability to run the center in the best interest of all tenants. Remember that a tenant could try to use the parking rights in its lease to block you from opera...

Q: A tenant at my shopping center claims that an ongoing plumbing condition in its space is interfering with its business. I’ve been trying to fix the situation, but the problem is extensive and has needed a series of repairs. Now, the tenant is threatening to move out, saying that it has been “constructively evicted.” However, it&rsquo...

Lease terms aren’t solely the deciding factor in who prevails when an owner and tenant disagree. The way in which one or both parties have behaved during the lease period can also be important—especially if the lease is ambiguous. In that case, a court may look to the “course of conduct” of both sides to determine how to proceed. So, when dealing with your tenant, make sure that you don’t do anything repea...