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 How a good lease saves time and money

It is amazing what a good lease form can do. It reduces review time and cuts legal fees. It is a pleasure to read (at least when you are a lease geek like me), and ultimately it will make enforcement and interpretation of the lease much easier – also reducing future legal fees.

I was recently asked to review a 90-page retail shopping center lease on behalf of a tenant. I thought “90-pages, that is ridiculous!” I have read many commercial leases since I first started practicing real estate law in 2000, but this was one of the longest, particularly given that the property to be leased was less than 2,000 rentable square feet.

I grabbed my coffee and comfortable sweater and settled in for the long-haul.

Excerpt from an especially well-written retail shopping lease.

I began reading this lease, and to my surprise, the writing was beautiful. Seriously. No typos, the internal section references were correct and the business terms reflected the letter of intent. And the best part – the basic lease comments that all tenants’ lawyers make (at least I hope they do), were already included. No need to spend time drafting lengthy paragraphs explaining things like why at the end of a lease year, the tenant should receive a credit for its over-payment of operating expenses, or that the tenant should receive rent abatement if utilities fail for more than 3 days.

In a landlord-friendly, and might I add, typical, lease these provisions are not givens. However, in this atypical 90-page lease, the basic comments I normally spend a lot of time inserting, were already included. What a brilliant idea. Let’s just cut to the chase and actually spend time commenting on and discussing provisions that require negotiation.

Sure, I do not sound pro-lawyer (sorry to all you billable-hour fiends), but at the end of the day, when faced with an inordinately long document to review, I would much rather read something well-drafted, that assumes basic lease intelligence, eliminates the stupid “gotchas” and is just reasonable. Not only is this better for my client in terms of reduced legal fees, but it shows good faith on the landlord’s part and demonstrates the landlord’s interest in building a positive future relationship. It also sets the tone for negotiations, causing discussions to begin with both sides acting more reasonably.

If more landlords prepared lease documents this way, the world would be a better place.

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