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What Are The Most Important Commercial Lease Clauses To Negotiate?

On Behalf of | Dec 12, 2019 | Firm News

As experienced commercial lease attorneys representing tenants nationwide, we have handled hundreds of commercial leases.  We are often asked why it is important to have an experienced tenant’s lease attorney review and negotiate the business lease.  Leases are extraordinarily negotiable documents that can make or break a business.  Below is my list of the top lease clauses to negotiate:

1. Release upon assignment – will you as both tenant and guarantor be released from the obligations of the lease if you sell the business and assign the lease to the new buyer?

2. Assignment – what are your rights/abilities to assign the lease to a potential buyer of the business? Has the landlord made it so difficult, that you will never be able to sell the business?

3. Personal guaranty – is this limited in time so that you will not be responsible personally for decades of rent if there is a default?

4. Use – is the use clause broad enough to cover all of the types of products and services you may offer in the future?

5. Exclusive use – can you get the right to be the only business in the shopping center or mall offering the products and/or services that you offer?

6. Operating expenses or CAM – are these pass-through charges being charged to you properly? Is there a cap on the charges? Do you have the right to check the landlord’s records to determine if you are being charged properly?

7. Signs – are you permitted by the landlord to use the sign that you want for your business (or if you are a franchisee, the sign required by the franchisor)? Will the local municipality approve your sign? What are your rights if they do not?

8. Permits – what happens if you are unable to obtain all the necessary permits for the business buildout? Do you have a right to terminate the lease?

9. Term – when does the term commence – at opening of the business, when you are handed the keys, when you sign the lease?

10. Rent – when does rent commence – when you open for business, when you are handed the keys to do your build-out? Some time period after signing the lease?

11. Default – are you provided enough written notice of a default that you are able to cure (fix) the default? Is there a period for monetary versus non-monetary default?

12. Remedies – does the landlord have the right to smash down the door of your business? Can the landlord forcibly take your personal property?

These are just a handful of the many clauses that we negotiate on your behalf as experienced tenant’s lease attorneys at Lanard and Associates. Let our attorneys be on your business team!