|
|||
|
Negotiating From a Position of Weakness Free Information On Negotiating From a Position of Weakness The tenants negotiating position is much weaker than it was when he first negotiated the lease. The tenant has a successful business at this location. Moving the business takes time and costs money. Nondisturbance Clause Tenants can avoid this dilemma by obtaining agreement that the lease will not be terminated by foreclosure. This is termed a nondisturbance clause. Landlords are reluctant to grant this concession due to the limitation it imposes on the landlord when obtaining financing. Maintenance Standards The definition of maintenance standards is often vague. A typical clause may read that "the landlord will maintain the property in a manner consistent with local practice and a prudent owner". Personal Guarantees Landlords love personal guarantees since they require the tenant to pay for the space whether or not he needs it. Personal guarantees should be avoided by tenants whenever possible. It is reasonable that the tenant repay the unamortized portion of any tenant improvements and leasing commissions if the lease is terminated early. Further, it is reasonable for a tenant to guarantee a minimal level of performance on a building built to its specifications. Different Rules for Second Generation Space? However, for second-generation office space, it is reasonable to request that the tenant only be personally or corporately responsible for paying the unamortized portion of tenant improvements and leasing commissions. Although this is reasonable, it may not be possible. The strength of the local rental market and local practice will dictate whether landlords can extract personal guarantees from tenants. Next Chapter Leasing Office Space - Purchase Option
| ||||||||||||||||