Real Estate Tip – How well do ‘one-size-fits-all’ leases really fit?
Many Maine landlords use the Maine Commercial Association of Realtors Commercial Lease as their ‘one-size-fits-all’ lease form. The form covers most topics that most landlords and tenants want to address. Landlords and tenants are understandably reluctant to re-write substantial portions of the form. Re-writes can inadvertently lose benefits built in to the form, cause delays and increase cost. However, following the form regardless can be a mistake. At the very least, be prepared to discuss the following questions:
• Renewal: Automatic instead of requiring tenant to give notice?
• Inspection: Allow for inspection by one party of the other party’s fit-up work as a pre-condition to occupancy or rent payments? Include status of title?
• Square Foot Rent: Specify rent per square foot based on post-construction or post-fit-up measurements?
• CAM: Delete/Add items to common area maintenance charges based on tenant’s length of term or location in the building or center?
• Uses: Specify uses not allowed rather than specifying only allowed uses?
• Tenant’s Improvements: List items tenant can remove at the end of the lease term?
• Casualty: Allow the tenant as well as the landlord to terminate the lease in certain casualty loss or eminent domain circumstances?
• Default: Allow more flexibility for curing non-monetary defaults based on nature of the default?
The Commercial Association of Realtor’s form is an excellent lease when used with skill. If these questions or others suggest the need for changes to the form, engage experienced lease counsel not to re-write the form, but instead to prepare an addendum that will customize the form for the specific transaction without losing the form’s benefits.
Today’s real estate tip is brought to you by Rick Smith, a LEED Accredited Professional and member of Bernstein Shur’s Real Estate Practice Group and Green Building Team. Stay tuned for more useful tips for real estate professionals.
For more information, contact Rick at firstname.lastname@example.org or 603 623-8700 ext. 8829 or 207 774-1200.