Negotiating a Commercial Lease for Business Lessees
Negotiating a Commercial Lease for Business Lessees

Commercial leases seldom follow a standard form and do not provide the same kind of protections as residential leases. While commercial leases are generally drafted in favor of the landlord, tenants may have the flexibility to negotiate more advantageous terms. Below is a summary of items that are often amenable to modification. These clauses should be reviewed carefully to ensure that the terms are understood and acceptable to the lessee. Duration of Lease. As a commercial tenant, the flexibility to terminate or extend a lease, or to renegotiate the lease term is critical. The term of a commercial lease can... READ MORE

California recently enacted the Uniform Voidable Transactions Act (UVTA), which introduces discrete modifications to the previous law governing fraudulent transfers, the Uniform Fraudulent Transfer Act (UFTA). The UFTA provided that a “fraudulent transfer” occurred when a debtor transferred property to a third party with the objective of obstructing or defrauding a creditor, or did not receive equivalent value for that property if the debtor was insolvent. The UFTA furnished a legal means for voiding a fraudulent transfer and returning the property to the debtor or debtor’s estate. The current UVTA revisions accomplish the same goals and are designed to conform... READ MORE

Under the Nonresidential Building Energy Use Disclosure Program, also known as AB 1103 (AB 1103), any individual who finances, sells or leases a non-residential building in California of a designated size is required to disclose the building’s ENERGY STAR ratings to the opposing party and to report this information to the California Energy Commission (CEC). The purpose of the legislation is to promote greater efficiency in commercial buildings through enhanced disclosure requirements. The reporting of energy use in the affected structures takes into account the consumption of all types of energy, including electricity, natural gas and fuel oil. This program,... READ MORE

If you operate a business and are looking to lease space for your operations, you need to know that the rules that apply to residential tenants are different from those that apply to commercial tenants. Most states, including California, have extensive legal protections for residential tenants in furtherance of the overall public policy of providing safe and secure housing to residential renters. Both federal and state laws are designed to protect the rights of residential tenants, who are deemed to be in an inferior bargaining position vis-à-vis their landlords. In contrast, commercial tenants are regarded as having the same skill... READ MORE

In a recent article Real Estate Takes Its Place as the Fourth Asset Class author David Funk, reflects on the historical shift in institutional investors from viewing real estate as an “alternative investment” to the current trend of many fund managers to permanently shift up to 10% in a portfolio position from stocks, bonds and cash to real estate. “What,” you say?  Less than 10% allocation in real estate investments for large institutional investors?  For family funds or individual investors active in the real estate market 10% seems dismally small.  Those who own significant real estate portfolios prefer real estate... READ MORE