Saturday, December 27, 2008

Commercial Real Estate Leases

Be Wary Of Hidden Unfavorable Tenant Language In Contracts

In my role as a Denver real estate attorney, I review a lot of commercial real estate leases for office and retail tenants. It never ceases to amaze me how one one-sided these lease agreements are written in favor of the landlord. More amazing, however, many business people simply sign these one sided agreements without taking the time to read each page, or retaining an attorney to review the document on their behalf. This is a terrible mistake.

Most commercial real estate leases range from 40-60 pages. I've just finished reviewing a lease that gave the landlord the ability to relocate the tenant at any time during the lease term, change the method by which the landlord calculates property operating expenses, and most astonishing, gave the landlord the ability to change any of the lease terms at any time if the project is refinanced. "Can a landlord do all of these things", you might ask. The answer is "absolutely" if the lease contains such unfavorable tenant language. Needless to say, I struck all of these provisions from my client's lease, along with other one-sided language. You should do the same when confronted with a commercial lease.

For anyone looking to sign a commercial lease, I have a simple piece of advice for you. Whatever you do - don't sign a commercial lease without thoroughly reviewing it. If you can't afford to have an attorney review it, you should carefully review all of the language on your own. However, in reviewing the agreement on you own, you still may not completely understand some of the language in the lease. Therefore, consider retaining an attorney. If you don't do this before signing the lease, you may need to hire an attorney later after you have signed the lease and problems arise.


Eric L. Nesbitt, Esq.
Law Offices of Eric L. Nesbitt P.C.
Phone 303-741-2354
Web http://www.nesbittlawoffices.com


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