A simple lease is not a short one.

Most people equate simple with short. If it’s a long document, that means it’s a complex transaction and there is a lot to discuss and rights, responsibilities and liabilities to define. A good commercial real estate lease will contain a lot more information besides the rent cost and the lease term.

Investing in a qualified attorney with relevant commercial real estate experience to review and negotiate the lease will strengthen and improve the Tenant/Landlord relationship. Both Tenant and Landlord can be satisfied that there is an understanding of the responsibilities assigned and the obligations imposed on each party. If there is a dispute, it will be easy to understand how to resolve it. Tenant and Landlord will understand their rights and responsibilities, and can make better business decisions, with full knowledge of the risk.

A short lease means that many provisions probably haven’t been negotiated- the parties might not even be aware that the provisions should be addressed. The party controlling the lease has decided to let the default statutory provision (aka, “the law”) control. This is often state-specific. Some commercial real estate leases can be invalidated, or at least legally challenged, if certain items aren’t addressed, disclosed, or otherwise appear in the lease agreement.

When the law and not the commercial real estate lease controls, then someone has to review the lease and then do the state-specific research regarding the circumstances, interpret the law, and make a legal recommendation on a course of action. If there is a lawsuit or dispute, that means someone is spending even more time and resources in pursuing a remedy. This someone is often an attorney, and attorneys charge for this service.

If only one party has a commercial real estate attorney representing them in the lease negotiation, then it’s a pretty lopsided negotiation. A sophisticated, business-savvy party understands the importance of having experience and knowledge on their side to reduce risk and protect their legal rights. Landlord will most likely have legal representation to negotiate and secure the best deal, Tenant should have the same.

Landlord’s attorney will represent Landlord, not to provide a fair and equitable lease negotiation. Landlord’s attorney will not point out favorable provisions to Landlord and explain the potential consequences and risk to Tenant. Many leases now have disclaimers, stating that each party acknowledges it should have legal counsel. If Tenant was advised to get legal counsel during negotiations, and doesn’t, then the lease won’t protect Tenant, and neither will the law.

If Tenant don’t take the time to get the lease reviewed and negotiated, or the lease is too short and doesn’t cover all the things it should, then Landlord and/or Tenant will have to hire an attorney to read the commercial real estate lease anyway, do the research to find out what the relevant law is, then render legal advice. Then, a decision has to be made and a course of action decided upon, with traditional dispute resolution techniques.

A short lease isn’t necessarily a good one. It’s better to invest at the beginning in the knowledge and experience a qualified real estate attorney what they’ll bring, to secure and protect your legal interests.


Disclaimer:

This article does not create an attorney-client relationship. This article is for general education purposes only and is not legal advice. You should consult with a qualified attorney before you rely on this information.

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