wish to deem the tenant a month to month tenant at a higher rent subject to the other obligations of the lease.
SUBORDINATION AND ESTOPPEL CERTIFICATES
Subordination: The lease should provide that the lease and tenant's rights under the lease are subordinate to the lien of all existing and future mortgages, deeds of trust and land leases on the property. The tenant should further be required to execute agreements requested by landlord confirming such subordination and other reasonable demands of landlord's lender. There should be a time period (i.e., 10 days) for tenant's execution and delivery of the subordination agreement after which time the tenant will be deemed in default. (See Form 20.)
Estoppel Certificates: The tenant should also be required to, upon request by
landlord, certify to landlord's lender and/or purchaser certain facts regarding the lease, such as commencement and expiration dates, rental, lack of defaults, etc. The landlord should not
be tied to a specific form and these clauses should also be drafted broadly to require the tenant to execute such estoppels as the landlord or its lender may require. (See Form 21.)
Mortgage Protection: Leases should require the tenant to give notice of any landlord default and the opportunity to cure to any mortgagee of the property to whom the tenant has been given notice and address. (See Form 22.)
Landlord's Lease Liability: The landlord's lease liability should be tied only to the
property and/or the landlord's ownership thereof. (See Form 23.)
Hazardous Substances: It is important that the tenant be prohibited from using,
storing or disposing of hazardous substances in violation of any applicable environmental laws. There should be a strong indemnification provision requiring tenant to indemnify landlord with respect to all costs, damages and penalties resulting from the tenant's use of
hazardous materials. (See Form 24.)
Preparation of the Leased Premises: The landlord should be specific as to what it
intends to do to prepare the leased premises for occupancy by the particular tenant and as to what it intends for the tenant to accomplish. The attorney should review all work letters and
construction exhibits provided by the landlord for legal issues and clarity.
Financial Statements: The tenant may be required to provide financial statements to
the landlord or a proposed mortgagee or purchaser upon the request of the landlord.