Don't Describe Termination Right Tied to Specific Event as 'Ongoing'

Be careful how you describe the termination right you give a tenant. If you grant the tenant a right to terminate its lease in the event its business is sold, for example, make sure the tenant is required to exercise that right within a specific time period of the sale date. Consider what happened to an owner in a recent case that involved a similar termination right: A New Jersey appeals court determined that the tenant’s termination right was “ongoing” and could last for years—a nightmare for the owner of the premises.