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Commercial property owners should ensure that their leases describe all tenant payments and charges as either “rent” or “additional rent.” While it might seem like a legal technicality, using these terms ensures you access to fast-track eviction if the tenant later defaults on its obligation to pay operating expenses, taxes, trash removal, parking fees, and other leasing costs.
SITUATION: With long-term plans to redevelop its mall, a Connecticut owner made it a point to include relocation clauses in leases with a restaurant tenant in an area slated for new construction. The clause also gave the owner the right to terminate the tenant for refusing relocation to substitute premises of comparable square footage.
The last thing any landlord wants is to allow a tenant to purchase the property while it’s in default. Unfortunately, that’s exactly what you might have to do if the purchase option clause in your lease contains a common loophole.
Guaranty agreements may cap how much the guarantor has to pay if the tenant defaults. For example, the agreement may say that $100,000 is the most the landlord can collect from the guarantor. If you include dollar caps in your own lease guaranties, just be sure that they exclude attorney’s fees, cautions a New York City leasing attorney.
It's important to make your notice to a tenant valid if your attorney sends it. If a tenant violates your lease, you're probably required to notify the tenant in writing that if it doesn't cure—that is, correct—the violation by a set deadline, you can take action against it. But it's common for owners to ask their attorneys to send this violation notice on their behalf, because they think that will show the tenant that they're serious and...
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...
A restaurant tenant isn’t happy about what it deems to be the landlord’s inadequate efforts to market the mall and abandons the property. Instead of immediately seeking a replacement, the landlord lets the space remain vacant and sues the tenant for rent.
We didn’t default on the lease, the tenant insists. And even if we did, we shouldn’t be on the hook for full rent payments because the landlord didn’t take steps to mitigate its dama...
When describing management fees that you'll pass through as a CAM cost or an operating expense, don't depend on synonyms for “manage” or “management” to convey your meaning. If you use only the words “supervise and administer” or “supervision and administration,” a tenant may argue that the lease doesn't authorize you to pass through “management” fees. So you may get stuck footing the bill for them....
A restaurant tenant isn’t happy about what it deems to be the landlord’s inadequate efforts to market the mall and abandons the property. Instead of immediately seeking a replacement, the landlord lets the space remain vacant and sues the tenant for rent.
We didn’t default on the lease, the tenant insists. And even if we did, we shouldn’t be on the hook for full rent payments because the landlord didn’t take steps to mitigate its dama...
The owner of commercial property comprised of two buildings with an adjoining lobby hires a brokerage firm to find a tenant for the space. The broker lines up a tenant. The lease runs five years and requires the “Owner” to pay the broker’s commission for the initial lease and any renewal term. The tenant signs the lease and the owner pays the broker a commission on the initial lease term.
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