Westchester County Bar Association

Commercial Leasing

Weiss & Weiss provides varied services to its clientele in the area of commercial leasing. We represent many local businesses in favorably negotiating leases for a new office or store location to be occupied by a business tenant, as well as for the modification of same. In addition, on behalf of landlords, we have drafted and negotiated leases for commercial spaces, including office and retail shopping center spaces. Our commercial leasing practice also comprises the interpretation of leases that have already commenced, whether responding to the necessity of revised lease terms and drafting and negotiating the documents necessary to memorialize an agreement or to the failure of a party to the lease to abide by the terms thereof.

Office space leases contain provisions that are included in other commercial leases. The following terms are typically covered in an office lease: base rent, security deposit, numerical formula for rent increases, responsibility for operating expenses such as taxes and building services, default provisions, assignment and sublease rights, and insurance requirements. If a store is located in a shopping center or strip mall, it would be important for the tenant to include a provision forbidding the landlord from renting to a similar business. For instance, a bakery would not want another bakery in the same center. On the other hand, office tenants do not have the same concern with respect to other tenants in an office building. Signage restrictions are more significant to a retail tenant than to an office tenant, as a retail tenant requires flexibility as to design, size and lighting to facilitate the location of its business. Condemnation and casualty clauses, while contained in most commercial leases of any type, take on more significance in retail store leases. If through a condemnation proceeding, a municipality acquires property that may have been used for parking spaces for a retail store, lease clauses pertaining to a tenant’s right to cancel the lease or receive a rent reduction may need to be employed. Likewise, if a fire occurs in the front portion of a retail store, it may render the business practically unable to operate. A fire in an office may not render the space unusable, as the space may be flexible as to how it is used by the tenant. As such, casualty clauses need to be more carefully drafted in a store lease.

Generally, the landlord, who owns the property, submits the first draft of the lease for negotiation. Major well-known tenants are the exception to this rule. They have a form of lease that is the only form that they will sign, which form is presented to the property owner. In any case, when representing tenants, our attorneys are experienced in negotiating tenant favorable clauses. In addition, we are mindful of the business needs of particular tenants for whom we negotiate. For instance, if the tenant is a hair salon, we will confirm that there is adequate water and electricity needs to suit the tenant’s business, without being deemed by the landlord as excessive use of service for which the tenant is expected to pay additional rent. If the demised premises is to be built out to suit the tenant’s needs, we will confirm that the tenant’s lease obligations will not commence until the landlord has complied with the build out requirements.

Our attorneys have experience in drafting and negotiating specialized leases such as net leases and ground leases. A net lease requires the tenant to pay rent, as well as taxes, insurance and maintenance for the property. When representing a tenant in a net lease negotiation, it is important to accurately define the tenant’s percentage interest in the common area and limit cost exposure. The definition of taxes for which the tenant is responsible is to be narrowly drafted when our client is the tenant. For example, we would typically request that inheritance taxes be excluded from the list of taxes for which the tenant is responsible. A ground lease is a special type of net lease, in which vacant land or land exclusive of a building, is leased. At times, a cooperative apartment corporation does not own the land on which the building is situated, making it the ground tenant. In such a case, we carefully review the ground lease involved to confirm that it will not expire in the near future, terms for renewal, ability to renew, whether the lease can be terminated, ability to construct and maintain improvements, determination of who owns the improvements, and right to mortgage the leasehold estate.

Our firm also prepares and negotiates ancillary lease documents. A guaranty may become one of the documents required in a lease transaction. There are various types of guaranty documents. For instance, a “springing guaranty” becomes effective only when certain events occur, such as if the tenant files for bankruptcy protection or there is a breach of another agreement between the parties. A payment guaranty only requires the guarantor to pay the obligations of the tenant, but not to perform other obligations under the lease. A “good guy” guaranty is effective so long as the guarantor physically occupies the demised premises. In such a guaranty, the guarantor promises to comply with all of the lease provisions on behalf of the named tenant.

Tenant estoppel certificates and their companion document, subordination nondisturbance and attornment agreements, are commonly required by commercial tenants when another transaction such as a mortgage financing or sale occurs. A lender or purchaser obtains a “snapshot” of the status of the relationship between the landlord and tenant through these documents, so that it is confident in concluding the transaction. In the estoppel certificate, the tenant states the lease terms through its perspective, such as monthly rent and date through which same is paid, security deposit held, any offets or defenses to payment of rent and the like. The attornment agreement permits the tenant, upon paying rent to another party besides the landlord (as required in certain circumstances), to remain undisturbed in the demised premises. Most commercial leases require the tenant to participate in the delivery of said documents. However, specific terms may be adjusted and our attorneys analyze said documents to thoroughly evaluate the current landlord tenant relationship prior to the commencement of a mortgage or sale transaction.

Our attorneys can also assist parties with respect to the termination of the landlord tenant relationship. Should a tenant wish to sublease, we coordinate approval of the landlord and the delivery of sublease or assignment of lease agreement as necessary. At times a surrender of lease or termination of guaranty document needs to be prepared by our attorneys. Attorneys in our real estate litigation and landlord-tenant practice areas are available to assist either party to a commercial lease should there be a dispute requiring litigation.

Client Reviews

Carolyn Weiss was knowledgeable, focused and supportive during my first home buying experience. I hope to work with her in the future.

Cristina C.

Nice job, very thorough!

Roy C.

I hired Eric Weiss to handle a dispute between myself and a very unreasonable tenant. He worked to resolve my issue with her in a most efficient and professional manner. I would recommend him to anyone who has a landlord-tenant problem.

Jeanette B.

Thank you Eric. I thought you did a great job on my foreclosure defense case. I would definitely recommend you.

J. Johnson

Thank you for all your help and assistance to get us through this transaction. We are so happy that it is finally over and behind us.

Daniel and Margaret L.

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