Commercial Leasing

Operating Expenses are intended to be the costs incurred by the Landlord in connection with the ownership, management, maintenance, and operation of the property, including such items as maintenance and repair costs, insurance, taxes, wages of employees, management fees and other costs to operate and maintain the property.  These costs are usually reimbursed to landlords by tenants in proportionate amounts.  As part of the lease negotiation process, landlord and tenants should review and negotiate what is commercially reasonable to include, or exclude, from Operating Expenses.

We often assist tenants in obtaining successful reimbursements of excessive or inappropriately charged operating expenses. During initial lease negotiations, we have successfully added language to ensure that the tenant has a process to review and analyze the landlord’s calculations.

You certainly have the right to restrict leased space for very specific purposes and uses that are permitted under the zoning for the property. You can also require any subtenant or assignee of the tenant to comply with the specific use restrictions. In addition, we can help you draft language to prohibit uses that may be legally permitted, but which you feel would have a negative impact on the value of your property.

Of course, the best time to ask this question is before signing a lease. We regularly work with landlords to request language that gives you the option of expanding or moving into available space in your current building. Likewise, we may negotiate the option to terminate your lease early. If you are currently in a lease that does not include either of these options, we can approach your landlord to negotiate on your behalf. Results vary on a case-by-case basis, depending on demand for the space you want to vacate, your relationship with your landlord, the expiration date of your lease, and other factors.

A landlord typically includes terms in the lease to restrict you from assigning the lease by bringing in a new doctor as an owner, which might cause a change in control of your company. Such a transfer of control and ownership could trigger the anti-assignment clause. Of course, it’s hard to anticipate all of the eventualities when you sign a new lease, but we leverage our long experience in this field to help you include terms that give you maximum flexibility to expand or change your practice without running afoul of your landlord.

Depending upon the financial viability and history of the tenant, a landlord may want a separate guaranty for the payment of monies and performance of obligations of the tenant.  The guaranty can be either from individual owners of the tenant or some other company related to the tenant.  The landlord and tenant should discuss if the guaranty should be absolute during the entire term of the lease, or if it should be limited for a lesser time or limited in amount.