Business ABCs: how to read your lease.

• Author: Spendlove, Cretta
• Position: Legal Briefs - Lease rights either business assets or liabilities

A LAWSUIT WAS FOUGHT, during the late 1990s, over whether Linen Store A, in a shopping center in the Fort Union area, had the right, under the "exclusives" clause of its lease, to keep the landlord from also renting to Linen Store B.

Across town, a tenant searched its lease in despair during the remodeling of an east-side shopping center during the early 1990s. The landlord had torn up the parking area outside the tenant's restaurant, and few hungry diners made it inside the tenant's doors. Alas, the lease included no provisions guaranteeing the tenant adequate parking.

Lease rights are valuable business assets, or expensive liabilities. Dade Rose and Paul Harman, two Salt Lake City lawyers specializing in commercial leasing, have these tips for business tenants:

Get what you need before you sign. 'A tenant's leverage is always best before the lease is signed," points out Rose. 'A tenant should make a wish list of what it needs, and negotiate those needs up front, rather than trying to make deals with the landlord later." Do you need a first right of refusal on the space next door? Do you need a T-1 line brought in? Ask for such things before signing.

Be careful of ambiguities. "Sometimes a lease will include an option to renew, but won't specify the rent during the option term, or a way of defining the rent," says Rose. "Make sure the basic terms are there, and that they're clear."

Tenant improvements are important. In many leases, the landlord agrees to finish the space to the tenant's specifications. 'Tenants usually like to keep as much control over tenant improvements as possible," Rose notes. 'They may negotiate to have the landlord pay cash and let them choose their own contractor to finish the space, rather than having the landlord do it."

Make sure your use is protected. Many leases contain "use" provisions limiting the purposes for which space can be used. Make sure your use clause is broad enough to cover not only what you're doing right now but what you may do before the end of the lease term.

Ask for exclusives. "In lease negotiations, wars are fought over exclusives clauses," notes Harman, "and the wars are usually between the '800 lb. gorillas'-- the landlord and its major tenants." "Exclusives clauses" are promises in your lease that the landlord will not rent to another tenant who does what you do. For...