It seems like lease issues come in cycles: seemingly out of nowhere, a particular issue that may have never been a concern on previous leases arises suddenly only to disappear once again. Is the rise to prominence of a certain issue indicative of something larger at play? Here are the issues I seem to be facing every day now.
Even small (in terms of leasable area) tenants receiving large allowances feel the need for an SNDA. These same tenants insist on every right in the lease carrying over to the lender. Lenders refuse to come out of pocket, even to allow the tenant to offset rent if it fails to receive the allowance (although the tenant must of course still pay full rent). Landlords want the tenant to pay the fee charged by the lender to execute the SNDA.
Landlords want the right to recapture space from a tenant who closes without reimbursing the tenant for any unamortized costs, even when the tenant has no operating covenant.
Tenants who pay percentage rent still want the right to go dark.
Landlords who breach a tenant’s exclusive on purpose want a fish or cut bait clause.
Landlords want the tenant to pay for the landlord’s loss of rent insurance, but do not want to allow the tenant to abate rent after a casualty.
Tenants want shell entities to be the tenant, want limited guarantees, and want to be released on assignment.
Landlords agree to a build-out period, but insist on having it start on the day of delivery even if the tenant has been unable to get a building permit.
Landlords want the right to charge an administrative fee on all CAM, even “non-controllable” items, in addition to a management fee.
Landlords say the covenant of quiet enjoyment is subject to mortgages and other encumbrances.
I will be glad when this cycle ends and we can go back to arguing over normal co-tenancy provisions. (Did I really just say that?)