As a busy healthcare provider, the last thing on your mind is your premises lease. The problem is that since your premises lease controls the space where you provide the service, not understanding or not managing your lease and related obligations can and will lead to expensive and time consuming situations. You can easily avoid disaster by having a handy and convenient summary of your lease obligations to refer to from time to time. You likely receive a monthly investment portfolio snapshot; why not have a handy lease summary?
Know that your landlord tracks your lease information and manages its position on a lease summary; it’s an industry standard that just makes sense. If you are a tenant without a lease summary, you are giving your landlord an opportunity to take advantage of you.
A lease summary helps you manage your affairs over time enabling effective and timely decision-making. Your summary should provide you with bottom line lease information extracted by an expert after careful consideration and integration of all your lease documents, enabling you to easily review all relevant lease information without taking the time to search, read through and understand each and every clause of your lease. Your properly organized summary will enable quick, convenient and appropriate decision making, even when your lease is very complex.
Your lease summary should be written in plain, easily read and understood English, and provide you with the key financial, business and legal information as well as any unusual lease provisions. Your lease summary should also point out those features missing from your lease which would be appropriate to protect your position. Your lease summary should keep things short and simple (two to five pages), without missing any nuance or subtle detail. Summarized lease information should be based on your individual need and let you know who, when and what to do about each issue requiring your attention.
Each lease is unique; therefore each lease summary is unique. To give you an idea of some of the terms and condition immediately available to you in your lease summary, consider the following list of details possible in a lease summary.
Lease term• commencement date• expiration date• number and length of renewal or extension term options, and associated time lines• how the options to renew or extend are administered
Rent• net or base amount, per lease year and per square foot• additional rent amount, per lease year and per square foot• how base rent should be managed• additional rent inclusions and exclusions• how additional rent should be managed• rent deposit amount
Premises• address• area measurement definition and certification• use of ancillary areas including parking• use of premises and exclusivity
Insurance• landlord insurance obligations• tenant insurance obligations
Landlord options to• terminate the lease when demolishing the building• terminate the lease as an alternative to assignment• relocate the premises• interfere with lease assignment
Tenant options to• relocate the premises• expand the premises• terminate the lease
Lease assignment• sharing with others• subletting to or with others• financing against premises assets• lease assignment when the practice is to be sold
Tenant• who or what is the “tenant”• who is a guarantor, or an indemnitor and what are the related obligations• can the tenant assign the lease and if so on what termsand conditions
Landlord• who is the landlord• who should you call about tenancy issues• is the tenant protected if the landlord sells the property
Additional provisions• are you restricted by a radius provision• are there any missing or conflicting provisions• what are the landlord and tenant notice provisions• do you have the ability to install appropriate signage• what are the landlord representations and warrantees• if the property is expropriated, who gets the award• are you required to participate in a merchants association or pay fees• are there any environmental provisions or LEED (green building rating system) requirements• who pays utilities and on what basis• what are the landlords administration fees• who pays for heating, ventilation and air conditioning replacement
Contemporary lease documents are very complex; reading and understanding them properly takes many years of training and experience. If your summary is wrong, or misses or misinterprets any important information, you will make the wrong decision.
My clients have enjoyed the benefit of a lease summary for many years, and always have the option to call for a consult concerning any aspect of their lease and their position from time to time. We also input important lease term dates in our computerized data base system and let our clients know well in advance of any important decision making time.
Each tenant should have a professionally and properly prepared lease summary immediately available for quick reference. Call me now to further understand the benefits of a lease summary and how my services can protect your interests.