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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.
What Happened: Another retail tenant has failed in its bid to use COVID-19 as an excuse for not paying rent. The tenant in this case was a New York City outlet of national retail chain The Gap, which claimed, among other things, that the pandemic and its resulting shutdowns constituted a “fire or other casualty” event rendering the premises unusable and relieving the tenant of its rent duties under the lease.
Q: Is there any benefit to letting a local charitable or nonprofit organization temporarily use vacant space in a center to collect donations, sell or distribute merchandise, or give out information about their programs?
What Happened: Like so many tenants affected by COVID-19, Saks Fifth Avenue stopped paying rent at its flagship New York City store. The landlord sued Saks’ parent company, the lease guarantor, for $2.7 million in unpaid rent. If these were normal times, we’d be liable for the tenant’s default, the guarantor acknowledged. But given the “unprecedented circumstances” of the pandemic, we didn’t breach the guaranty, it ar...
Renting office space to a corporate tenant requires some special handling of the typical assignment clause in a lease. Usually, an assignment clause requires the owner’s consent before the tenant may assign the lease. A corporate tenant may try to get around this by simply transferring their stock to the intended assignee. That is why smart owners insist on treating a major change in the tenant’s ownership as an assignment.
With most office workers able to work from home, the pandemic hasn’t hit office tenants—and thus their landlords—as hard as it’s hit tenants in the retail, restaurant, and hospitality sectors. But with employees productive at home, office tenants are reconsidering their need for office space.
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