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Mid Atlantic R eal E state J ournal Publisher ............................................................................ Linda Christman Publisher ............................................................................... Joe Christman Section Publisher .................................................................... Steve Kelley Associate Publisher .............................................................Alissa Aronson Associate Publisher ..........................................................Barbara Holyoke Senior Editor/Graphic Artist .................................................Karen Vachon Production Assistant ....................................................................Julie King Office Manager .................................................................... Joanne Gavaza Contributing Columnists ........................................................... Yasir Billoo Mid Atlantic R eal E state J ournal — Published Semi-Monthly Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, 312 Market St. Rockland, MA 02370 USPS #22-358 | Vol. 27 Issue 7 Subscription rates: $99 - one year, $198 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Toll-Free: (800) 584-1062 | MA: (781) 871-5298 | Fax: (781) 871-5299 www.marejournal.com
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Renter Beware: Top Considerations for Commercial Leases Yasir Billoo
J.D. Parker Manhattan
Brian Hosey New Jersey (201) 582-1000 Bryn Merrey Washington, D.C. (202) 536-3700
B
usiness leases (also known as commercial leases) are increasing
(212) 430-5100 Brenton Baskin Philadelphia (215) 531-7000
in complexity and length, with the potential for many pitfalls if the reviewer is not careful. Whether your business is en- tering into a lease for simple office space or a large retail operation, it is worth the effort (and relatively minimal cost) to have an attorney review the commercial lease and, if necessary, negotiate the legal terms of the lease with the landlord. Here are some of the most important considerations for potential tenants of all com- mercial leases: Personal Guaranty Landlords often require one or more personal guaranty of the lease. Your first goal should be to try to negotiate the guaranty language out of the lease altogether, by offering the landlord added security, such as a larger security deposit. If that does not work, and you believe the
The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
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lease will be profitable enough to risk personal liability, you should try to include as many limitations into the guaranty as possible. Landlords will negotiate with you on such limitations, but you need an attorney to guide you on the appropriate language to best protect you. Breach & Default Provi- sions You should require written notice followed by a grace period before the landlord may exercise default rights; the grace period allows a cure period for the tenant to make a late rent or comply with another requirement of the lease. Otherwise, in Florida, the landlord must only give
continued on page 22A Finally, and most impor- tantly, most commercial leas- es have consequences once a default is uncured and many such provisions give landlords the right to re-enter the prem- ises and lock you out, without a court order to do so. While self-help for commercial leases is not permitted in Florida, you 3 days to pay or vacate the premises. Additionally, you should try to negotiate a maximum amount of damages in the event of tenant default, such as three months of base rent, similar to the negotiations referenced in the section re- garding personal guaranties, above.
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