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Smooth transactions do not gain notoriety. That’s a good thing.

A commercial real estate lease is a legal document that covers rights, responsibilities and obligations of the parties involved. Regardless of which side of the contract you find yourself (landlord’s or tenant’s), signing a contract will create a legally binding agreement between you and the other parties involved.
The transactions that go smoothly don’t cause much notoriety; all the parties are happy in the end. The problem is when transactions go wrong. The main question then becomes, will yours be the side exposed to the most liability?
Here are a few points to consider before signing a commercial lease:

The origin of the lease.

Which party created the lease? The party who created the document will almost always put their party in a more favorable situation. If you get to be the creator, your attorney will make sure your interests are protected first and foremost. One of our clients received a draft lease from a prominent landlord that put such negative provisions in its sections, that while the landlord could rely on a 15 year tenant, the tenant could really only rely on a lease that was month-to-month. While those may have been unenforceable, the tenant would have been disadvantaged from the start.
Are the provisions of the contract current? Have there been changes in the legal code, or even in the way things work in the world, that could have a negative impact? The legal landscape changes to reflect society, and so what was permissible before may not be permissible today – and that could bite you if your lease is outdated. A landlord we represented was unable to passthrough any of the expenses he thought he was able to, simply because the lease used was a form lease from the early 80s. We renegotiated on his behalf and updated the lease to be current, but this mistake from a previous attorney cost him tens of thousands of dollars over the term of the lease.
Was the contract prepared by a real estate agent instead of an attorney? Many legal problems are caused by poorly drafted agreements by well-meaning, but unqualified, real estate agents. A comma in the wrong place could change the meaning of the entire provision. When it comes to rights, liabilities and obligations, it is wise to have your contracts drafted by an attorney who is not only skilled but is legally able to do so.

Experience in real estate matters.

Have you been exposed to the issues that can arise in a landlord/tenant? Are these issues thoroughly addressed in the contract? Is your side represented well? Real estate is a specialized area of law. Many landlords and tenants learn by experience, but, as they also learned, the tuition at the School of Hard Knocks is much to high. Using an attorney with experience in commercial real estate as a landlord, tenant, broker, transactional law AND litigation gives you a very complete map. It gives you the confidence of expertise of what can go wrong and what can, with a little tweaking, go extremely right.

Timing and pressure.

How objective are you about this specific transaction? Are there important areas that are implied, rather than included in the contract? Have you considered what would make the transaction a deal breaker? Are those issues addressed in the contract? The more urgent the deal appears, the sloppier and less thorough your attention to detail becomes. Especially when the pressure is made greater by large numbers at stake.

An experienced commercial real estate attorney can make the difference to your future.

There are many pieces to the leasing puzzle, and we help you navigate the contract, including the determination of which parts are critical for your success and which are less important. We strategize with you on the following areas and more:

  • Basic provisions
  • Possession
  • The premises and its measurement including BOMA standards
  • Terms and options
  • Parking rights
  • Security deposits
  • Base rent and percentage rent
  • Late charges
  • Holdover if there isn’t a renewal
  • Rental increases
  • Personal guaranties
  • Rent abatement
  • Operating expenses and rent increases – what can be passed-through and how
  • Use and whether or not it will be allowed by the municipality
  • Sign criteria
  • Tenant improvements and work letters
  • Indemnification and who has to protect whom
  • Insurance clauses
  • Repairs, maintenance and warranties
  • Trade fixtures and what stays at the end of the lease
  • Obligations of the landlord and tenant
  • Damage and destruction
  • Assignment of lease, subleasing and future transfer of business
  • Breach of lease and what remedies exist for both parties
  • Estoppels, subrogation, attornment and other complex issues
  • Options to renew

We will also educate you on what the entire transaction should look like given the Agreement – from exchanging the keys to strategies for eventual renewal. Here is how an experienced commercial real estate attorney will help your side of the deal:

  • We put time on your side. When managed properly, no real deal will escape due to timing issue. Deals don’t die due to small amounts of time. The deals that do die were not realistic to begin with.
  • Ensure that your side and your interests are the ones that are being represented. That’s the difference between just crossing your fingers versus confidence that lets you sleep well at night.
  • Understand your obligations, without exposing yourself to unnecessary liabilities.
  • Avoid future lawsuits over misunderstandings, errors, or omissions
  • Have a second and objective pair of eyes to look over your deal.

The attorneys at the Moschetti Law Group have been representing high net-worth individuals, private equity firms, and family offices for over 16 years. We built our firm on a set of principles which puts our clients first by providing outstanding representation, aggressive negotiation, and world-class client service and communication.
See how the Moschetti Law Group can help by setting up a free, no-obligation strategy session right now.


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