Crook Legal Group Blog

Utah employment law, Utah real estate law, and Utah business law.

Posts tagged Commercial Landlord
7 Things a Commercial Tenant Should Know Before Signing a Lease

1. Beware the Binding Nature of Your Lease

This should go without saying, and yet, far too many businesses learn this the hard way. Yes, a lease is a binding legal contract. No, a landlord is not likely to let you out of it just because your business is struggling. Let's say you sign a 5-year lease for $3,000 per month. You just signed a $180,000 contract. Every commercial tenant should go into a lease with the mindset that it will be bound to pay all or a substantial portion of the full contract price. (There are some exceptions; e.g., the landlord's duty to mitigate.)

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Types of Commercial Real Estate Leases

An owner of commercial real estate is usually concerned with at least five types of expenses:  (1) property taxes; (2) property insurance; (3) CAM expenses (the cost of common area maintenance, e.g. parking lots, sidewalks, and landscaping); (4) utilities; and (5) janitorial services.

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What happens when a commercial lease is missing terms?

Sometimes commercial landlords and tenants are so eager to sign a written lease agreement that they neglect to include all of the essential terms that will govern the relationship. When this happens, it is likely that the parties do not even have an enforceable contract. 

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One Tricky Sentence to Add to a Prohibition of Sublease Provision

Almost all commercial leases have a provision that in some form or another prohibits the tenant from subleasing to a third party without the landlord’s prior written consent. But what would happen if the tenant ignored that provision, subleased the property without the landlord’s knowledge, and made money off of the sublease? Would the landlord be entitled to collect that money from the tenant?

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What is a Commercial Landlord’s Duty to Mitigate?

Fact scenario: A commercial tenant breaches the lease. There are three years left on the term of the lease. The commercial landlord is therefore damaged in the amount of monthly rent for the 36 months left on the lease. But, the landlord may not be able to hold the tenant liable for all 36 months of rent. The landlord must take reasonable steps to find a new tenant and thereby reduce or “mitigate" the damages. 

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Essential Landlord Provisions in a Commercial Lease - Personal Guarantee

John Doe is an aspiring entrepreneur and wants to lease a building for his brilliant restaurant idea. John Doe sets up ABC Restaurant, Inc. ABC Restaurant, Inc. and the landlord enter a five-year lease. The landlord incurs $30,000 in tenant improvement expenses. 



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