Without further adieu, here are ten (10) reasons why a Tenant should consider hiring an experienced commercial real estate attorney to negotiate a commercial Lease in New York:
- Commercial Leases are often voluminous and densely packed with legalese. An attorney can explain the terms and conditions in plain English. Generally speaking, a commercial Tenant does not have the same legal protections as a residential Tenant under New York State statutory law. If a dispute arises, the language in the Lease often controls so it is important to understand (and negotiate where necessary) the terms of the Lease.
- The Landlord has its own attorney. The Landlord’s attorney represents the Landlord’s interests. Because the Landlord’s attorney typically drafts the Lease, the Lease typically favors the Landlord. In order to level the playing field and ensure that the Tenant’s interests are also protected (this is not necessarily a zero-sum game), a Tenant must hire its own attorney. An experienced broker can help negotiate the business terms but only a licensed attorney can “issue spot” and negotiate the legal terms.
- An attorney can explore ways to minimize the Tenant’s personal liability in a manner that is acceptable to the Landlord.
- An attorney can build flexibility into the Lease by negotiating the assignment and subletting clause.
- An attorney can build flexibility into the Lease by ensuring that the permitted use is not overly restrictive. The attorney can also help determine whether the use is permitted by the local zoning authority, and whether any other licenses or approvals are necessary.
- An attorney can ask questions that a Tenant had not considered, such as a right of first offer on contiguous space, an exclusive and a renewal option. These deal points can add value to the Lease, and in turn, add value to the business.
- An attorney can find the hidden “gotchas” and make sure that the Tenant enters into the transaction “eyes wide open.” The attorney’s fees associated with negotiating the Lease at the beginning of the term often pale in comparison to attorneys’ fees in the future if a dispute arises. Simply put, litigation is expensive, time consuming and a drain on resources. A good Lease that clearly memorializes the rights and obligations of the parties can minimize the risk of litigation.
- An attorney can assist with title and environmental due diligence to minimize the risk of post signing surprises.
- An attorney can liaise with the broker and the Seller’s attorney to ensure that the transaction is completed in an amicable and timely fashion. If the Tenant is performing work within the demised premises the attorney can insert language to help ensure that the Landlord’s approval is not delayed.
- An attorney can work with the broker and help the Tenant save money by exploring creative ways to protect the Tenant’s “free rent period,” structure rent escalations, “burn down” security, cap/control additional rent, and manage other costs.
For more information about our real estate practice area and the attorneys who are ready to assist you, please do not hesitate to call us at (914) 338-8050.
Betensky Law PLLC
The Empire Building
26 Village Green, Suite 4
P.O. Box 22
Bedford, New York 10506-0022