Vol. 31, No. 2, #5. Issues to Consider in Drafting of Commercial Leases.

• Author: Author: Scott W. Meier

Wyoming Bar Journal

2008.

Vol. 31, No. 2, #5.

Issues to Consider in Drafting of Commercial Leases

Wyoming Bar Journal Issue: April, 2008 Author: Scott W. Meier Issues to Consider in Drafting of Commercial Leases

Leasing premises is a major investment decision, whether your client is a landlord or a tenant. In fact, it is highly unlikely that any single transaction will affect the lives of more businesspeople more than the real estate lease. Unfortunately, many attorneys do not understand the complexities of a commercial lease and how a commercial lease can be fraught with potential problems. These leases have broad implications, not the least of which is the prospect of your client losing a business should something go wrong. Issues Regarding Both Parties

It is extremely important that the lease agreement properly state the correct names of the legal parties. All too often counsel (and perhaps brokers) relies on the letterhead, a business card or worse yet, a verbal statement of the party's representative for the correct name of the party. Reviewing the organizational documents or checking with the Secretary of State may save considerable embarrassment.

Specific Issues for Landlord's Counsel to Consider

In representing a landlord, you should consider several issues. First, you need to ensure the lease documentation meets your client's needs. You must be able to explain to your client, preferably in plain English, how the lease operates and his or her rights and obligations under the lease. Since boilerplate language rarely fits, you may also need to adapt any special requirements your client may have into the lease agreement.

In drafting the lease agreement, you may need to consult with other advisors working with your client such as his or her banker (if the property is subject to a mortgage) or the client's architect or builder (if your client's needs involve construction and/or modification). Involving additional advisors will help ensure that the commercial terms incorporated into the agreement are appropriate.

Third, you should discuss with your client the importance of not only finding the right tenant with whom he or she is comfortable, but also one that your client is confident can pay the rent and leave the premises in a satisfactory condition. Other considerations you will need to take into account include:

...