Watch Out For What ISN’T In Your Lease!

In the brokerage side of my practice, I sometimes get leasing clients that don’t want to hire an attorney. Usually, they are smart, successful people that have a high level of business acumen. They figure that they can read the lease and see if there’s anything they need to worry about. After all, it’s in English…right (well, sort of, anyway)? Unfortunately for them, leasing is a very specialized industry, and the clauses in your lease can have very specific meanings that can affect your wallet in a very meaningful way.

Here’s what I mean. As a leasing attorney and broker, I may be able to read a government contract for the purchase of computer software just fine. I may even be able to catch some clauses that don’t seem fair or right to me. However, since my knowledge of the computer software industry is limited, and since each industry has its own terminology and norms that are at least semi-foreign to the rest of society, I couldn’t do anywhere near as good of a job negotiating that contract as someone that knew the language, the industry customs, the prevalent rates and percentages, etc. of that industry. Likewise, nobody knows leases and leasing like a leasing broker and a leasing attorney. A general practice attorney (however brilliant they may be) generally can’t do a very good job negotiating a lease. You can imagine how poorly a layperson would do at it.

Anyway, sometimes a client will say “I read the lease, and it looks good to me”. I will generally ask them if there is a landlord’s default clause in the lease, and the answer is usually no. Then, I will ask them if there is an obligation for the landlord to insure the property. The answer is often no to that question as well. I have several more questions that I ask these folks, but I’m not going to get into them right now. Suffice it to say that those answers are also generally non. The point is that most landlord forms leave out valuable tenant protections. Generally, the shorter the landlord’s lease form, the more devoid they are of important protections for the tenant. After all, chances are that they didn’t leave out the protections that they want for themselves.

Recently, I saw a landlord lease form from a large regional developer. They spent three and one half legal-sized pages outlining what constitutes a tenant default and what the ramifications would be if the tenant defaulted. However, there wasn’t a single word in the lease about what constituted a default by the landlord. Obviously, default is an important topic, or they wouldn’t have spent more than three pages of the office lease defining tenant’s defaults. Most tenants that review their own leases would never have picked that up. Many non-leasing attorneys would never have picked that up. If you decide to review your own lease, at least try to look at what isn’t in there as well as what is in there.


About marylandcommercialleaseadvisor

I am a veteran negotiator that has done hundreds of retail, office and industrial leases throughout the United States. I have been a licensed Maryland attorney since 1985, and a licensed commercial real estate broker dating back to 1991. I have served as an expert witness in commercial real estate matters on multiple occasions, and have been a national instructor on real estate leasing issues, retail investments, and distressed commercial assets and REO's. From 1995-2004, I served as the head leasing attorney for the eastern United States for Glenborough Realty Trust, a $2.5 billion diversified REIT that was traded on the New York Stock Exchange. I offer a full spectrum of expert leasing services to landlords and tenants of all types. I am well trained in site location, and I can find the perfect location for a tenant. I can negotiate the business terms with the best of them, PLUS I am an accomplished leasing attorney that has negotiated against many of the best leasing attorneys in the nation. I have negotiated leases for/with companies such as Lord and Taylor, Circuit City, Starbuck's, Outback Steakhouse, Hometown Buffet, Popeye's, Chipotle, U.S. First National Credit Union, Merrill Lynch, New York Life, Bella Photography, Parsons-Brinckerhoff, Caterpillar, Fed Ex, Clear Channel Communications, and many other noted national and regional companies. I have also worked with scores of local regional tenants. I have also developed and leased out a shopping center, and have been a commercial tenant upon at least three occasions myself. I also spent four years as a commercial construction and permanent lender for a large bank. So, I understand real estate leasing from virtually all sides of the deal. That enables me to negotiate win-win deals for clients of all types. I am available as a broker, attorney, and/or consultant to landlords and tenants alike.
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