When negotiating a lease extension option, parties may be uncomfortable agreeing on a specific rent amount for the option period, especially in a lease with a long original term where the option term starts far in the future. The parties sometimes want to defer establishing the rent amount until the option term rolls around

  A right of first refusal may appear straightforward, but certain factors, such as a broker’s potential commission, can make them complex. To make a lease deal, the landlord often provides the tenant a right of first refusal to purchase since it “doesn’t cost anything,” and the tenant may never exercise the right. However, a right

  Who is actually saved by a listing agreement’s “savings clause”? A listing agreement is a contract pursuant to which an owner hires a real estate broker to market and sell a property, and is legally required to have an expiration date. These agreements typically contain a provision referred to as the “savings” clause to address what happens

Seven Steps to Expedite Sales

Thursday, 14 February 2013 by

  In this buyer’s market, companies disposing of excess properties and lenders selling REO portfolios must plan ahead in order to successfully sell their properties. This article provides seven practical steps for sellers to take to expedite sales before marketing their properties. Seller should prepare a Phase I environ-mental report, instead of allowing a buyer

Navigating CAM Expenses

Monday, 14 January 2013 by

  When negotiating a lease in a multi-tenant project, such as a shopping center, office building or industrial park, the parties often heavily negotiate the provisions relating to expenses of maintaining the common areas (often referred to as “CAM” or “triple net”). The concept is fairly simple — landlord recoups expenses of maintaining the areas used

Indirect Control of Lease Transfers

Friday, 14 December 2012 by

  Against the backdrop of a projected slow economic recovery, commercial landlords and tenants are battling over who will profit from future increases in real estate rents. The parties directly address this issue in the assignment and subletting provision of the lease when they decide who will benefit from increases in market rent through profit

  Buying property at a foreclosure sale is fraught with risks, one of which is the buyer being forced to refund the tenant’s security deposit in addition to the purchase price. The risk is affected by the type of property, as the law generally provides more protections for the security deposit of a residential tenant

Negotiating Exclusive Uses

Sunday, 14 October 2012 by

  While negotiating a shopping center lease, the tenant often requests the exclusive right to conduct its intended business in the center. However, granting the tenant an overly broad or an ambiguous exclusive right may harm the landlord. So, the landlord should minimize such potential negative consequences by considering the following:   When considering exclusive

Build-Outs Made Easy

Friday, 14 September 2012 by

  When the premises must be designed and built before the term of a lease begins, the stakes are high and any dispute or delay is detrimental. To avoid potential losses of rents or profits, both parties must understand and define their responsibilities for the design and construction of tenant improvements, allocate risks, and provide

Profit Sharing In Leases

Tuesday, 14 August 2012 by

To take advantage of today’s commercial real estate market, the tenant would like a long term lease to lock in the current low rental rates. The landlord, however, is reticent to forego the anticipated future rise in market rents by entering into a long term lease. A means of resolving this conflict is for the