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If you’re like many commercial real estate owners, you’ve considered using “alternative dispute resolution” (ADR) methods, including arbitration, to resolve your differences with tenants out of court. For example, when you and a tenant are certain you disagree on a single, clear-cut issue, arbitration may be the best place to start.

By David S. Houston, Esq.

In this economy, it’s tough enough to fill your center with tenants, without inadvertently letting existing ones sublet space to businesses and restaurants that compete with your leasing efforts. For example, if you’re searching for a tenant to fill vacant restaurant space at your center, but another restaurant tenant decides to sublet its space, you’ll both be, in essence, competing for the same tenant—a restaurant that wants to lease space in y...

Generally, commercial leases require tenants to return space in the same condition as it was rented to them. There’s some leeway for “ordinary wear and tear” to the space. But there are several ways that a tenant can negatively affect you when it moves out, or “surrenders” the space, not just by damaging physical items there.

Generally, commercial property owners provide cleaning services to tenants. They typically hire and use a cleaning contractor that they choose. However, specialty tenants sometimes ask that they be allowed to hire their own, separate cleaning contractor. Tenants that have confidential information, such as banks and medical offices, and are concerned that a cleaning crew will have access to it, or tenants that have especially expensive merchandise, like jewelry stores, a...

Owners often give tenants a “free rent” concession—that is, a portion of the term of a lease when no rent is required—to entice them to lease space. For example, in order to attract tenants to your new office building, you might offer a three-month rent-free period to those who sign a five-year lease. Free rent is a very common concession, especially during lease negotiations for space at a shopping center or office building that has a high vacan...

Many important events and options for you and your commercial tenant are measured from your lease’s commencement date. The commencement date controls critical information, such as when the lease will expire, when rent starts, and when the tenant’s special options must be exercised.

An exclusive use clause is a highly valuable clause in a tenant’s lease because it will grant the tenant the sole right to sell certain products or operate a certain type of business in the shopping center where it rents space.

In a good economy, where commercial properties enjoy low vacancy rates, owners can more easily avoid giving termination rights to tenants. But in the past few years, more tenants have been negotiating to get them. Allowing a tenant to terminate its lease should be a last and final resort; generally, owners should reserve a termination right only for large or national tenants that have the leverage to demand it.

Before a prospective tenant signs a lease for space in your shopping center, it will want to know certain information about the center to make sure that the space will be advantageous to its business. The information it's interested in will most likely include items like the location of the barriers, common areas, curb cuts, entrances, exits, loading zones, other tenants, and parking areas; the size of spaces; the means of access to a space; and the size and locatio...