Saturday, December 20, 2008

Free Consultation

Contact me at 206-623-0579 for a free half hour consultation on the proposed commercial lease you are asked to sign.

DISCLAIMER

Disclaimer Details

I am providing the content on this blog solely for the reader’s general information. This blog contains my personal commentary on issues that interest me. This is NOT a newspaper; it’s a BLOG. Unless otherwise stated, the views expressed on this blog are mine alone, and not the views of any law firm with which I am in any way associated or any other member of any such law firm. Nothing on this blog is intended to be a solicitation of, or the provision of, legal advice, nor to create an attorney-client relationship with me or any law firm. You should seek professional legal counsel authorized to practice law in your jurisdiction before acting on any information contained on this blog. I expressly disclaim any and all liability of any kind or nature with respect to any act or omission based wholly or in part in reliance on anything contained on this blog. I am not licensed to render advice except in the state of Washington, and I do not offer legal services to the residents of any jurisdiction where it would be prohibited for me to do so.

Any links that appear on this blog are purely for your information. I’m not making any representations as to their content or, in fact, any other matter concerning them. Merely because a link to a third party site appears on this site doesn’t mean that I have reviewed the site an approve it or its content. I don’t control any such third party sites and I’m not responsible for their actions, omissions or content. Follow all links at your own risk. If you access any third party site linked to this site or acquire any goods or services from any such third party, you do so at your own risk. I disclaim any liability for any reason connected with any such third party, its site or any goods or services advertised by or ordered or acquired from any such third party.

Communication

You may not form an attorney-client relationship with me by the use of this blog, leaving comments to any post, or sending me an e-mail. An attorney-client relationship with me can be established only by entering into a written engagement agreement signed by me. If you do not have an existing attorney-client relationship with me, do not send confidential information to me by e-mail links found on this site or by any other means unless you are authorized to do so by me. Such communication will not be subject to attorney-client privilege. If you have an attorney-client relationship with me, information that you send to me within the scope of that relationship will be handled in accordance with the applicable Rules of Professional Conduct. However, please be aware that if you send to me any such information by e-mail that is not encrypted, you accept the risk of interception, loss, corruption or lack of confidentiality.

If you do not have an attorney-client relationship with me, I may post to this blog or otherwise use all or any portion of any e-mail, voice mail or other communication you make with me including, without limitation, any personally identifiable information that you send to me for any purpose I may deem appropriate in my sole discretion.

I am not obligated to respond to any e-mail sent to me through this blog or to any comment left on this blog and I disclaim any liability for failing to respond to any e-mail or comment generated by this blog.

Changes

I may change this Disclaimer in whole or in part at any time and from time to time, without notice, by means of, and effective upon, posting the revised Disclaimer to this page. Last update to this page was made on December 20, 2008.

Sunday, December 7, 2008

LEASING COMMERCIAL SPACE AS A TENANT: PART EIGHT

“SUBORDINATION” AND “NONDISTURBANCE”

When the landlord insists that you agree to allow its lender to subordinate your lease to the lender’s lien, that is, to make the lender’s rights superior to yours, insist on a Anondisturbance” provision requiring the landlord to provide you with an agreement from its lender that if the lender takes over the property it and any of its successors will continue to respect your lease rights so long as you satisfy your lease obligations.

LEASING COMMERCIAL SPACE AS A TENANT: PART SEVEN

IMPROVE THE “ESTOPPEL” CERTIFICATE PROVISION

You may be required to provide an “estoppel” certificate or letter at the demand of the landlord. In it you must state whether certain things about your leasehold relationship are true, such as whether the landlord is in default, the rent has been paid more than one month in advance, and whether and if so how the lease has been amended since it was originally signed. It is intended to be relied on by a third party such as a bank or purchaser. Have a qualified attorney review it because the third party can come after you later if your statements are untrue. Specify that your statements are made only “to the best of your current knowledge and belief.” You might try to get the landlord to promise to provide you with a similar statement or certificate which you can give to your lender when you are trying to refinance your furniture, fixtures, equipment or tenant improvement loan.

LEASING COMMERCIAL SPACE AS A TENANT: PART SIX

KEEP THE LANDLORD FROM BEING ARBITRARY

Propose that whenever you are required to get the landlord’s approval or consent, it will not be unreasonably delayed or withheld. If you cannot get such a blanket provision, try to insert the requirement at each point in the lease where you want to avoid arbitrariness on the part of the landlord.

LEASING COMMERCIAL SPACE AS A TENANT: PART FIVE

PROTECT YOUR VISIBILITY, ACCESS AND PARKING

Try to include a provision preventing the landlord from making changes that would materially interfere with the visibility of your premises or signage from nearby roadways, or with your customers’ convenient access and parking.

LEASING COMMERCIAL SPACE AS A TENANT: PART FOUR

AVOID RELOCATION PROVISIONS

Try to avoid a provision which would allow the landlord to relocate you to another space if it wishes. If it is unavoidable, ask for the right to comparable space with comparable access and visibility, the right to prevent the relocation if you reasonably believe the space is not comparable, and a promise that the landlord will pay every cost associated with the relocation including remodeling, moving, and publicizing the new location, and another promise that the relocation will occur during your slow season.

LEASING COMMERCIAL SPACE AS A TENANT: PART THREE

USE A TITLE REPORT TO YOUR ADVANTAGE
As part of your due diligence before entering into the lease it is often advisable to obtain a current title report or preliminary title insurance commitment on the premises and the building in which it is located. Try to get the landlord to supply the report, but if that is not possible or the landlord’s most recent report is a bit stale then get your own. Ask a local title insurance company for a “preliminary leasehold title insurance commitment.” Most title companies are happy to provide the report, though if you do not plan to purchase the insurance ask about the cancellation fee. It is usually small. Besides assuring yourself that the landlord actually owns the property, you may discover an encumbrance which is inconsistent with your business. For example, I once found a recorded restriction on outdoor retail sales when my client wanted to offer outside dining. Even the landlord was surprised. We made removal of the restriction a condition of the lease.

LEASING COMMERCIAL SPACE AS A TENANT: PART TWO

CLEARLY DESCRIBE THE SPACE YOU WANT TO RENT

Make sure the lease clearly describes the space you want to rent. A drawing with dimensions is an excellent way to do this; make it an attachment to the lease. This or another drawing should show the location of the space within the building that contains it, your exclusive or non exclusive parking area(s), where your large trash containers are to be kept, and any other areas of importance (e.g. storage areas). A legal description of the premises or the building in which it is located is also important. In addition, clarify which areas are included in your premises for your use and for rent calculation purposes, such as hallways, bathrooms, and mechanical areas, and which areas are “common areas” for use by all tenants.

LEASING COMMERCIAL SPACE AS A TENANT: PART ONE

Startup and expansion of businesses often require leasing space for new locations. Because the lease represents a major financial commitment it deserves careful attention. Most proposed leases are drafted by and favor the landlord. The lease negotiation is the tenant’s time to understand and, to the extent possible, improve its provisions.

FIRST NEGOTIATE A DETAILED LETTER OF INTENT

Work with the landlord to develop a fairly detailed but non-binding letter of intent setting out all of the business terms that are particularly important to you, such as the lease term, options to extend the term, the location you would lease, the square footage of the space, the rent, parking available for you and your customers’ use, tenant improvements to be made and/or paid for by the landlord, preliminary approval of your signage and decor, and so on. If you cannot agree at the letter of intent stage there is no point in getting into detailed lease negotiations.
Loading...