Navigating the Complex World of Business Property Leasing-the Tenant's Side

Summary

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No consultant, real estate broker or lawyer likes to be accused of over-lawyering a lease. But clients often fail to recognize that a lease is a very complex document. State rules vary widely in identifying parties' obligations and rights when nonresidential property leases fail to address key issues. However, in one respect, all U.S. courts agree: To a substantial extent, parties can change the rules by signing a written lease that contains different rules than the law would otherwise impose.

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Extract

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Navigating the Complex World of Business Property Leasing-the Tenant's Side

NO CONSULTANT, REAL ESTATE BROKER OR LAWYER likes a client to accuse him or her of over-lawyering a lease. This is particularly true when one is acting on behalf of a prospective tenant in a lease that has been prepared by the landlord. A lease is a very complex document; a fact that clients who do not deal with leases on a regular basis fail to recognize. The lease is only a "simple" document for those who are not knowledgeable.

The leasing of real estate for business use has been a part of the business scene since time immemorial. Originally, the courts viewed a lease as a sale of the real estate for the term of the lease. That concept resulted in the tenant taking the property with all its defects and inadequacies, and the lessor having no responsibility for the condition, repair or maintenance of the property during the lease term. The tenant also was required to continue paying rent under any circumstance. Even if the building burned down, the tenant was obligated to pay the rent.

When the subject of the lease is residential property, all states have changed that rule by court decision or legislative action. But when it's a business lease-whether the property is commercial, office or industrial property-the rule has been changing very slowl...

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