Dos & Don'ts

Dos & Don'ts

Don't Allow Limits on Subtenant, Assignee Signage

May 28, 2012    

Don't let a narrow signage clause in your lease hamper your ability to sublet or assign if you need to move out of all or part of your space. There are two scenarios in which a restrictive signage clause could interfere with this: (1) you want to sublet a portion of your space and you and...

Get Recognition, Attornment Agreement for Subtenant

May 28, 2012    

A prospective subtenant may be wary about signing a long-term sublease or making a sizable investment in improving your space if it's worried that if you go bankrupt or the owner terminates your lease, the subtenant will get evicted with you.

Shorten Lease's Cure Periods for Subtenant

May 28, 2012    

When subletting space to a subtenant, be careful to limit certain rights that you have in your lease, especially terms regarding the time period within which the subtenant can cure a default. If you're subletting space, make sure that the cure periods for your subtenant in your sublease are...

Don't Sign Lease Without Cure Period

May 28, 2012    

Think twice before signing a lease that deprives you of a period of time to cure—that is, fix—an alleged lease violation. Otherwise, you could easily end up in default and then subject to the owner's harsh default remedies, such as the right to evict you from your space.

Condition Signing New Lease on Amending Others

June 30, 2011    

If you're like some retail businesses, you've grown and opened new stores at multiple locations. And if you've been happy with the owner of the space you rented for your first store, you may have rented space for your other stores at the owner's other properties. But if you were...

Send Entire Lease to Insurer

June 30, 2011    

Send the entire lease to your insurer before you sign it. Your insurer can then review and approve all the insurance-related sections of the lease and the coverage it requires you to have. If the insurer refuses to give you the required coverage, you'll be able to address that...

Don't Use “Direct Pay” to Pay Rent

June 30, 2011    

If an owner suggests that you pay your rent through “direct pay,” don't agree to do so, says lease management expert Elizabeth Ferrara. “Direct pay gives the owner too much power—and leaves you with too little control over how much the owner withdraws from your bank...

Check Availability of Documents Needed to Prove “Substantial Completion” of Construction

May 31, 2011    

Before you agree in the lease that either you or the owner will supply certain documents—such as a certificate of occupancy (C/O)—to prove that construction is “substantially complete,” check into whether those documents are available in your area. If you discover too...

Have Space Professionally Laid Out Before Signing Lease

April 25, 2011    

Before you sign a lease for new space in a building, consider hiring an architect, space planner, or interior designer to help you determine whether the layout of the space will meet your business requirements. Otherwise, you may find out too late that the space isn't suitable for your needs...

Make Lease Definitions Easier to Locate

March 19, 2011    

When drafting your leases, put all definitions of lease terms in one place, such as a glossary at the front of the lease or an index, suggests Desmond D. Connall Jr., a Washington, D.C.-based real estate attorney. This should help make your leases easier to read and understand.

Use Terms “Landlord” and “Tenant” in Lease

March 19, 2011    

When drafting leases or lease amendments, use the terms “landlord” and “tenant,” rather than “lessor” and “lessee,” to avoid confusion, suggests James V. Persino, a Chicago-based commercial property developer. It's difficult to confuse or...

Convey Meaning of “First Class” in Use Clause

March 19, 2011    

If a lease requires you to sell “first-class” products or run a “first-class” business, have the owner add synonyms for, or exclusions to, the term “first-class” to help convey its meaning. Without them, the term “first class” will be too vague and...