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A new trend is occurring whereby landlords are being held liable for the illegal activities of their tenants—regardless of the landlord’s involvement in those illicit activities. This trend is extremely disconcerting and requires landlords to take unprecedented measures and exert significant efforts to protect themselves from liability exposure to court-awarded damages for their tenant’s illegal activities.
Attorney’s fees are a point of contention in many owner-tenant disputes. Typically, one party argues that the other party should pay for its own legal fees and the legal fees the first party has incurred as a result of the lawsuit or other legal proceeding.
If an environmentally “risky” tenant, such as a dry cleaning business, gas station, or auto service center—which all use chemicals that could contaminate your property—will be lucrative enough to make taking the risk of potential damage worth it, it’s crucial that you protect yourself from liability and shift responsibility for any mistakes to the tenant. You don’t have to let a great lease deal go out of fear that you’ll be left with an environmental nightmare if the tenant fails to clean up a spill or leaves other damage behind.
Technological advances that provide security and convenience for users are being made in leaps and bounds, and even the traditional commercial real estate industry is benefitting—most recently, from digital signature software. Traditional methods of executing leases and related documents—that is, ink-on-paper signatures—leave the door open for potential misunderstandings and even fraud. Digital signatures are a game changer—protecting both office and retail owners and tenants from the inherent flaws of traditional lease signing.
One thing you do not like to hear when negotiating a commercial lease agreement is that the tenant must have possession of the space by some important date, known as the “drop-dead date.” Why? Because the tenant usually wants the landlord to suffer a variety of draconian consequences if the drop-dead date isn’t met. Examples include free rent, significant monetary penalties, and sometimes, the ability for the tenant to terminate the lease agreement.
One of the key economic questions any commercial lease must address is whether the tenant is responsible for paying real estate taxes on the property and, if so, how much. More often than not, the tenant does have tax liabilities, but because of the money involved, the issue is often hotly negotiated. And while every deal is different and generally reflects the bargaining power of the sides involved, there are eight protections that owners should seek in any negotiation with their tenants over tax allocation terms in the lease.
The lease agreement is almost fully negotiated. You are down to the final one or two issues to wrap it up. The issue? The tenant wants the right to enter the premises prior to the commencement date (and during the landlord’s renovations) to perform some renovation work and install furniture and fixtures. No problem, right? Not so fast. There are a plethora of issues lurking in this request.
Retailers aren’t the only type of tenant that prioritizes advantageous signage. Major office building tenants like banks or financial firms may also demand special name and signage privileges, sometimes in return for renting a large block of space. Most commonly, a tenant will want the most prominent signage on the building’s exterior and in the lobby. But in some cases, a tenant may insist that the building be named after it, in an effort to increase name recognition in the community.
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