Guaranties: Where a tenant is a shell entity, subsidiary or upstart company, landlord
may be wise to require a guaranty from individual principals or corporate parents, as applicable. (See Guaranty attached as Form 1.)
Credit Enhancement: In a case where there is a business concern regarding the ability of the named tenant to meet its obligations under the Lease, Landlord may require additional credit enhancements in the form of a larger security deposit and, ideally, a letter of credit securing the Tenant's obligations under the Lease. (See Form 26.)
Property: The "Property" or "Project" should be defined in terms of name, address,
municipality and state. A legal description and, if applicable, a site plan should be attached as exhibits to the lease. The names of current and prospective tenants should not be included on the site plan attached as an exhibit to the Lease as this could be seen as a representation to the applicable tenant as to other specific tenants and the tenant mix. The lease itself should expressly disclaim any implied representations regarding the location of
improvements, anchor tenants or tenant mix.
Premises: The "premises" to be leased should be clearly identified on the site plan
or floor plan and by address, suite number, municipality, state and zip code. There should
also be stated an approximate square footage of the premises.
Relocation of Tenants: In some cases, the landlord will want to preserve the right to
move or relocate some, if not all, of the smaller tenants in multi-tenant buildings or shopping
centers. In such cases, it is reasonable for the landlord to bear the expense of such relocation.
Expansion, First Refusal and First Opportunity Rights: The granting to tenants of the right to expand into adjacent space, or the right to lease such additional space prior to lease of such space to another tenant always restricts the landlord's flexibility in the future. If such rights are a necessary ingredient to the transaction, the applicable provisions should be very carefully drafted so as to be as specific and detailed as possible. If such provisions are vague or ambiguous, the landlord may be subjected to major obstacles and/or delays at the time these rights need to be enforced or interpreted. (See Forms 2, 3 and 4.)
Initial Term: The term of the lease should be specified by a number of years or
months with a designated commencement date.