Retail Leases – Caution for the Unwary Tenant

Why does someone need an attorney to review the retail lease; isn’t it just all boilerplate? The answer to that is, absolutely not.  Although many leases have similar clauses, it is often what is not in a lease that matters.  A lease is a critical component of the success or failure of a business.

So, what types of issues and concerns should be addressed?  A few of the matters you should consider:

  • A clear definition of what is included and what is excluded from Common Area Maintenance (CAM) charges.  We attach an exhibit with 28 items that the Landlord should exclude from CAM charges.
  • The right to audit the Landlord’s books and records relating to CAM charges.
  • A clear definition of Landlord’s responsibilities for repair – what is included in structural repairs?
  • A clear definition of lease term, notice for any options to renew and rent commencement date.
  • Tthe ability to transfer or assign the lease and be released from responsibility under the lease.
  • A clear definition of the intended use.  Make sure it is broad enought to encompass your intentions in the future.
  • Americans With Disabilities Act compliance warranty.

I have listed just a sampling of the many areas of a lease that should be negotiated to protect a retail tenant.  Regardless of whether you have had a broker or franchisor negotiate the business/financial terms of a lease, legal review of the lease by an experienced lease attorney is essential.

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