The law firm's real estate practice includes commercial and residential transactions and litigation. One particularly busy area of our practice includes advising clients with commercial leases. Today, many commercial leases are "form" leases such as those prepared by the American Industrial Real Estate Association (AIREA). People often feel that since the lease is "boilerplate," (standard contract language) this eliminates the need to show such a lease to a business lawyer. They feel there is nothing that can be done to change the terms of this type of lease.
We believe that there is no such thing as "boilerplate."
"In a major matter no details are small."
Paul De Gondi.
There are a couple of things to remember when dealing with a commercial lease, especially if it has been drafted from a template or boilerplate.
- Everything is negotiable.
- In the unusual cases where part of the boilerplate is non-negotiable, the client is well advised to have the business lawyer explain its content. Often hidden in the fine print are terms that can have a serious impact on the client and their business. "Sometimes the best investments are the ones you don't make." Donald Trump, 1946-, American Businessman.
At relatively modest expense to the client, a good business attorney can quickly review and explain the meaning of such leases, and any terms that may be hidden in the fine print. Remember, a real property lease is one of the most important contracts you will enter into in your business so it is so important not just to have basic understanding of the lease, but a detailed understanding of all of the lease provisions. Leases are very often the subject of business lawsuits which can be very damaging to a tenant. Since a lease is nothing more than a written contract, the lawsuits are very straightforward because all the landlord must show generally is that you signed the lease. In the vast majority of these cases the tenant does not have available any effective or meritorious defenses to the lease. Because a lease if often for several years, the tenant's potential exposure can be very great--several hundreds of thousands of dollars in many cases. Personal liability is almost always the case because just about every landlord requires that an individual either be the tenant on the lease, or personally guarantee the lease. When you add up all these factors, it is very important to be very well informed about what the lease says so that you fully understand all of your obligations.
"The will to win is important, but the will to prepare is vital."
Joe Paterno, American Football Coach--Penn State.
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