Commercial Lease Law Answer Book

Commercial Lease Law Answer Book features questions and answers that arise when drafting and negotiating a strong, enforceable, owner-advantage commercial lease. 

Owning and managing a commercial property, or advising a client who owns a retail space or office building comes with a myriad of issues. Numerous rules, restrictions, and regulations apply to these properties and formulating a commercial lease that benefits the owner while also keeping the commercial tenant satisfied can be a tricky juggling act.

 

Commercial Lease Law Answer Book is designed to clarify typical-and not-so-typical commercial leasing issues. It highlights an owner's advantages and warns readers of pitfalls and loopholes to avoid when drafting and negotiating leases with commercial tenants. Written in a convenient Question-and-Answer format, the book covers a wide range of issues, including:

• Construction – phased developments, work letter agreements, and scaffolding
• Environmental Issues - going "green", monitoring indoor air quality, and PLL insurance
• Financial Issues – asset protection (including the difference between LLC's and LPs)
• Guarantors and Guaranties - explanation of the "good-guy" guaranty
• Termination and Eviction – the kick-out right.
• Rent and Rent Abatement
  
• Disputes
• Liability
• Risk Management
• Rights and Renewals
• Insurance
• And much more!

 

• How you should respond to a tenant demanding to be excluded from CAM costs in a phased development
• What to include in an indemnification agreement
• How an "equity strip" works
• What types of indoor air quality responsibilities you can delegate to the tenant
• How to give a start-up business a rent credit without jeopardizing your interests
• What you should consider when leasing space to a law enforcement agency
• And much more!

 

This easy-to-use reference also includes practical pointers, real-world examples, and model lease clauses and language that will help formulate a commercial lease that benefits the owner, while keeping tenants satisfied.

 

For the latest commercial lease news and information, visit http://www.commercialleaselawinsider.com

 

Table of Contents

 

Chapter 1: Construction

 

• Phased Developments
  Detail Layout, Boundaries, Construct As Shown, and Parking Demands
  Owner Develop Entire Center and Pursue Construction to Completion
  Construction Interfering with Tenant's Business
  Construction-Related Claims, Condition of Center, CAM Costs
  Tenant's Exclusive, All Phases, and Entire Center Issues
• Definition of 'Vanilla Box'
• Contractors and Subcontractors
  Model Letter: To Tenant to Avoid Liability for Contractor's Mistakes
• Tenant's Buildout and Expansion Option
  Model Lease Clause: Contractors
• Tenant Improvement Allowance (TIA)
  Model Lease Clause: Conditions for Financing Tenant Improvements
  Limits on Costs Covered by TIA
  Model Lease Language: Limiting Soft Costs
  Tenant Does Not Assign Right to Improvement Allowance
  TIA Not Intended for Future Improvements
• Pre-Occupancy and Other Improvement Issues
• Project Redesign
• Work Letter Agreements
  Model Clause: Definitions of Base, Shell, and Core
  Beyond Material and Labor Costs
  Scaffolding
  Model Lease Clause: Scaffolding

Chapter 2: Disputes, Liability, and Risk Management

 

• Alternative Dispute Resolution
  Arbitration
  Mediation
  Model Lease Language: Mediation
• Indemnity
  Indemnification Clause
  Model Lease Clause: Personal Injury and Property Damage Insurance
  Indemnification Agreement
  Model Agreement Letter: Indemnification of Costs of Architectural, Engineering Plans
• No-Mitigation Clause
• Specific Forms
  Residential to Commercial
  Lease Protections
  Model Lease Clause: Failure to Deliver Possession
• Liabilities for Injuries

Chapter 3: Environmental Issues

 

• Going Green
• Indoor Air Quality
  Add Protections to Leases
  Tenant's Obligations
  Manage and Monitor IAQ
• Environmental Insurance
  PLL Insurance Policy
  PLL Insurance Coverage Specifics
  Model Lease Clause: Environmental Insurance

Chapter 4: Financial Issues

 

• Asset Protection
  LLCs and LPs
  Charging Order Protection
  Equity Strips
• Property Tax Escalation
• Franchise Taxes
  Model Lease Language: Taxes
• Obtaining Loans
  Tenant Estoppel Certificate
  SNDA
  Why Lenders Demand Estoppel Certificate and SNDA
  Lease Strategies to Secure Loan

Chapter 5: Guarantors and Guaranties

 

• Guaranty Agreement
• 'Good-Guy' Guaranty
• Guaranty When Renting to Limited Liability Entity
  Lease Requirements
  Model Lease Clause: Guaranty
  Possible Tenant Modifications

Chapter 6: Insurance

 

• Deductible as Operating Expense
• Commercial General Liability Policy
• Waiver of Subrogation Clause
• Meaning of Insurance Requirement
• Terrorism Risk Insurance

Chapter 7: Options, Rights, and Renewals

 

• Tenant's Right of First Refusal
  Placing Limits
  Events that Will Not Trigger Refusal Right
  Model Lease Clause: Right of First Refusal
  Conflicts with Other Leases
• Options and Negotiating Special Rights
• Renewals

Chapter 8: Rent

 

• Additional Rent
• Operating Expenses/CAM Costs
  Capital Replacement Pass-Throughs
  Model Lease Clause: Capital Expenditures
  Pass-Through Costs After Disasters
• Percentage Rent
  Slotting or Placement Fees
  Off-Site Sales in 'Gross Sales' Definition
  Tenant's Annual Sales Reports
• Rent Concessions
  Model Lease Clause: Rent Abatement
  Start-Up Tenants
  Security Deposit Concessions
  Model Lease Clause: Security Deposit Concession
• Rent Payment
  Model Lease Clause: Late Fee and Default Interest
  Rent Acceleration Clauses
  Model Lease Clause: Rent Acceleration
  Performance Kickout Right and Reduced Rent
  Model Lease Clause: Conditions for Termination Right/Reduced Rent Right
  Where Tenant Must Send Rent Payment
• Rent Abatement
  Model Lease Clause: Return to Full Rent After Cotenancy

Chapter 9: Specialty Leasing Issues

 

• Banks
• Federal Agencies
  Law Enforcement Tenants
• Franchises
  Model Lease Clause: Termination of Franchise Agreement
• Medical Office Tenants
  Contamination Cleanup Responsibilities
• Nonprofits

Chapter 10: Sublets and Assignments

 

• Assigned Leases
  Model Lease Clause: Modification Following Assignment
  Lease Assignment in Good Faith
  Tenant's Assignment Profit
  Model Lease Clause: Sharing of Assignment Profits
  Lease as Collateral
  Model Lease Clause: Assignments/Sublets by Tenant's Lender
• Sublets

Chapter 11: Termination and Eviction

 

• Termination
  Model Lease Clause: Termination Lease Option
  Kick-Out Right
  Bad Faith Termination
  Condemned Property
  Illegal Contract Terms
  Standard Right of First Refusal
  Extension Term
• Eviction
  Building Demolition
  Constructive Eviction

Chapter 12: Use and Exclusives

 

• Use
  Flexible Use Clause
  Model Lease Clause: Permitted Use
  Limits on Tenant Use
  Certificate of Occupancy
  Revocable License for Extra Space
• Exclusives
  Landlord Leasing Covenant
  Model Lease Clause: Landlord Leasing Covenant