The Lease
A lease is one of the most detailed and complex transactional documents. At first blush, this comes as a surprise to many, but it should not when one considers that a lease governs the entire spectrum of the relationship between landlord and tenant and covers every conceivable issue, dispute and calamity that might occur during the lease term. As a result, lease negotiations are some of the most protracted and the lease itself is one of the longer transactional documents in the business. In addition, lease negotiations are also some of the
most sensitive as undue displays of leverage have the potential to burn bridges at the outset of a long term relationship.
Sensitivity and long term thinking are the keys to successful lease negations. Obviously, in a 50+ page document, many of the provisions work to the benefit of one party and to the disadvantage of the other. The attorney’s negotiating the lease must be able to compromise and think creatively in a manner that allocates the obligations, risks and liabilities in a fashion that is acceptable to the client.
After the agreement is negotiated the lease is documented. Even more important than determining who bears the obligations, risks and liabilities, is the need for a clearly drafted lease document which expressly spells out the responsibilities of the parties. Commercial lease terms can last years and due to changes in ownership and assignments, it is not uncommon for a dispute to arise between two parties who were never involved in the negotiation or drafting of the initial lease. If the four corners of the lease are in anyway ambiguous or unclear, disputes will necessarily follow. With no obvious mechanism for easily resolving the ambiguity, these disputes can be costly.
most sensitive as undue displays of leverage have the potential to burn bridges at the outset of a long term relationship.
Sensitivity and long term thinking are the keys to successful lease negations. Obviously, in a 50+ page document, many of the provisions work to the benefit of one party and to the disadvantage of the other. The attorney’s negotiating the lease must be able to compromise and think creatively in a manner that allocates the obligations, risks and liabilities in a fashion that is acceptable to the client.
After the agreement is negotiated the lease is documented. Even more important than determining who bears the obligations, risks and liabilities, is the need for a clearly drafted lease document which expressly spells out the responsibilities of the parties. Commercial lease terms can last years and due to changes in ownership and assignments, it is not uncommon for a dispute to arise between two parties who were never involved in the negotiation or drafting of the initial lease. If the four corners of the lease are in anyway ambiguous or unclear, disputes will necessarily follow. With no obvious mechanism for easily resolving the ambiguity, these disputes can be costly.