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You can try, but savvy tenants are demanding that the rental value of an amenity space be excluded from CAM or operating expenses. In this video, excerpted from their live presentation on June 13, 2019, "What Could Possibly Go Wrong? Key Issues to Resolve BEFORE an Office Lease Is Signed," speakers Robert Reichman and Jonathan Weiss, both of Greenspoon Marder LLP, discuss this contentious issue. View the video Read More
Boilerplate renewal and amendment agreements typically contain language indicating that the tenant’s obligations under the original lease survive and become obligations under the new arrangement. But they may also include contradictory language saying that the new lease “supersedes” the previous one. And when you put these clauses together, it could jeopardize rent payment and other tenant obligations from the original lease that you want to continue b...
Before you go into negotiations with a prospective tenant, make sure you have a financial analysis of the proposed lease, so you can tie every added dollar of capital investment per square foot to an amortized x dollars at a certain interest rate over the lease term.
If a prospective tenant isn’t a U.S. business or individual, it may not have sufficient assets within the U.S. to protect you if it eventually defaults. Preferably, the tenant can provide a U.S. guarantor. But if a non-U.S. entity or individual is the only available option, be sure to confirm that the guarantor has sufficient assets in the United States. And in the absence of a guaran...
An electronics store leases 3,000 square feet of shopping center space. But the city won’t let the store operate until wheelchair ramps are installed and the parking lot is re-striped to comply with the Americans with Disabilities Act (ADA). The owner refuses to do the work. So the tenant pays a contractor $30,000 to make the required modifications and sues the owner for its costs, claiming breach of the lease. Key lease terms:
A letter of credit (LC) offers distinct advantages over a cash security deposit. If the tenant defaults, drawing on the LC should be as easy and automatic as making a withdrawal from the tenant’s security deposit account. Unfortunately, it doesn’t always work out that way. The key is what the LC says.
Let’s say a dry cleaner wants to lease space in your strip mall. During negotiations, its attorney asks for a use clause permitting use of the premises for not only dry cleaning but also any other uses you find “reasonably acceptable.” It seems fairly unobjectionable, especially since you’re the arbiter of “reasonably acceptable.” So, you agree.
Depending on whether your property manager is a third party or works directly for you, it will probably check in differently. Because it’s providing financial information to you, a third-party property manager is obligated to report to you at least monthly regarding financial issues and any other predetermined topics. A property manager that works directly for you might have a tendency to check in more often. But both types of property managers should be instructe...
There are two ways to evict a tenant: (1) “Actual eviction,” or going to court to get an eviction order, is the proper way; and (2) “constructive eviction,” or doing something so egregious to interfere with the tenant’s business that it forces the tenant to leave, is the other way—one you want to avoid at all costs. The term “constructive eviction” is misleading since the tenant actually decides to leave without being orde...
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