Business & Commercial Insight: Real Estate Leasing
1. Business & Commercial Insight: Day-to-Day Business
Management Regarding Real Estate Leasing Transactions
Client: Last year, you advised me on the development of my company. Business has been great,
and now we are looking to lease office space, enter into contracts with third-party vendors and hire
employees—can you help us with that? Or should we seek advice elsewhere?
You: Yes, I can help you with all of that—let’s sit down and discuss our approach.
Often, clients expect their counsel to provide advice on all aspects of their business. Before
responding to these requests, it is important to understand the legal landscape of several areas of
law at every point in your client’s business lifecycle and draft the relevant agreement, in order to
identify issues for your client.
Advise Your Clients on Real Estate Leasing Transactions:
Whether your client is entering into a retail, industrial or office lease, the attorney has several roles that
may include drafting and reviewing the lease, negotiating the lease terms or advising about specific terms
of the lease. As a preliminary matter, it’s important to understand the overall nature of the transactions
to determine whether the lease will satisfy the tenant’s objectives. Find out what information should be
obtained at the preliminary stages of a commercial real estate leasing transaction:
• Is the location of the premises appropriate for the tenant’s business?
• Are the premises the right size for the tenant’s intended operation?
• Is tenant’s intended use of the premises permitted by the certificate of occupancy and relevant
zoning laws and ordinances?
• Are necessary approvals, permits or licenses required for tenant’s intended use of the premises?
• Will major improvements and alterations be necessary to the premises to make it suitable to tenant’s
needs and anticipated use(s)?
• Are there any potential environmental concerns with respect to the premises, such as previous use
of hazardous materials and/or contamination?
• What additional rent, such as tenant’s share of the operating costs for the premises, will be incurred
during the term of the lease?
• Are the lessor’s rules and regulations for the property reasonable and not going to interfere with
tenant’s intended use and enjoyment of the premises?
• Will tenant be permitted to assign and/or sublet all or a portion of the premises as may become
necessary or desirable during the term of the lease, and will the conditions to any such assignment or
subletting be reasonable?
Lexis Practice Advisor®