Peter Baggerman

Tuesday, 05 August 2003 08:03

Lease points

Tenants look to their landlords for much more than the right to occupy space; they frequently purchase a number of services.

The landlord may build out the leased space for the tenant's specific use. It will probably provide heating and air conditioning, cleaning, utilities and communication services.

The landlord is also frequently responsible for most, if not all, of the maintenance and repair of the premises and the facility of which it is a part. This includes shoveling snow, patching parking lot potholes, keeping the lawn mowed, the lobby clean and the elevators running, and providing security.

A landlord's failure to meet its obligation to a tenant can have a negative impact on a tenant's business.

In contrast, a tenant's responsibilities amount to not much more than paying in advance for use of the leased space and the services provided by the landlord.

Many commercial lease forms attempt to reverse this imbalance of responsibilities. They specify the tenant's responsibilities and detail the many painful remedies available to the landlord if the tenant strays from the straight and narrow.

When they get around to describing the landlord's obligations, however, leases are often vague. They frequently attempt to excuse the landlord from the consequences of a failure to meet the lease obligations and to limit the remedies available to the tenant if the landlord breaches the lease.

For assurance that a tenant gets what it was told it would get and what it is paying for, every commercial lease should at least:

* Describe in detail the landlord's responsibilities to the tenant. A carefully drafted lease will set forth the hours during which heating and air conditioning will be provided and establish agreed-to temperature and humidity ranges.

* Define what constitutes a default by the landlord and describe the remedies available to the tenant if the landlord fails to perform its obligations. Many landlord lease forms eliminate these provisions or severely water down the remedies available to the tenant.

* Provide a method for quick, inexpensive and final resolution of disputes over the lease.

A tenant should be firm in securing these provisions in a proposed lease. In the long run, it is worth the effort to avoid disruptive disputes. Peter C. Baggerman is a lawyer at Eckert Seamans Cherin & Mellott LLC.