At Aimee B. Davis Law P.C., I often represent tenants entering into either billboard leases or commercial space leases.
In real estate leasing, it is customary for the landlord’s attorney to serve up the first draft, and for the tenant’s attorney to provide comments. With billboard leasing, the tenant more likely presents the first draft, as they are the experts in this space. A billboard lease is unlike a general commercial space lease, and there are special provisions that are standard in the industry. Conversely, there are provisions that customarily arise in commercial space leases that are absent in billboard leasing.
Sometimes negotiating these “standard” terms out of a billboard lease is challenging when dealing with real estate counsel unfamiliar with these vertical space leases. Since no one is actually occupying the leased premises in billboard leasing, it may not be appropriate to include lengthy provisions that protect the landlord’s interests in vacating a defaulting tenant, which would ordinarily be relevant in a commercial space lease.
Nevertheless, in negotiating leases on behalf of tenants, consideration should always be given to the “silent” issues. “Silent” issues are those that may be important to a client, but they are not easy to identify because there is no mention of them in the first draft of the lease that is provided.
Depending on the market, the parties, the transaction, its timing and the scope of my engagement, I may or may not be tasked with raising new issues. But in each case, whether or not I’ve seen the physical space, I make it a point to discuss, among other things:
As discussed in last month’s blog, I typically seek to limit or cap my client’s indemnity obligations in the event damage is caused to the leased premises. In addition, issues relating to a tenant’s right to assign or sublet the space may be relevant if my client intends to share the leased premises with others during or after its tenancy.
Following a thorough review of my client’s deal-specific issues and concerns, a great amount of time is spent in contemplation of provisions that are NOT included in the lease. I often find it necessary to incorporate additional language to reflect the deal-specific business terms in order to adequately protect my client’s interests.
Taking the time on the front end of a deal to understand the nature of the physical space and my client’s intended use thereof is essential for a successful representation of tenants in long term leases. In real estate leasing work, a successful representation also involves figuring out the relevant “silent” issues that are missing from the lease form. This will likely save the client money on the back end.