A lease abstract is a document that summarizes specific, key information from a lease agreement. Leases can be lengthy documents with confusing legalese. Lease abstracts allow users to easily reference and review fundamental lease terms to ensure that both the tenant and landlord are in compliance with applicable obligations, timeframes, etc.
This series will go through a typical lease abstract and explain the various terms and what is important for a tenant to understand.
- Lease provision giving landlord the right to terminate a tenant’s leasehold interest in a property. Landlord termination options can be an independent lease provision and/or a right reserved by the landlord pursuant to tenant’s default, damage by fire/casualty, condemnation, taking by eminent domain, etc.
- What’s important – Understanding what conditions trigger a landlord’s right to terminate the lease and the timeframes associated with each.
- Lease provision giving landlord the right to relocate a tenant within the floor, building, or project. Most leases contain relocation provisions as a way for landlords to accommodate larger tenants and/or existing tenants’ growth.
- What’s important – Relocation rights solely benefit the landlord. Moving costs are generally covered by the landlord; however, amounts of coverage can vary greatly. Tenants can negotiate additional moving cost concessions such as landlord paying for new business cards, marketing materials, etc. There are costs to the tenant associated with relocation that extend beyond monetary considerations ranging from mere inconvenience to decreased visibility in the case of retail space. Tenants will want to negotiate the maximum amount of time for notice and actual relocation. Crucially important is the description of what constitutes comparable space. Points of negotiation can include: same number of windowed offices, same floor or higher, elevator lobby exposure, same visibility within a retail center, same square footage or greater, etc. In the case that the square footage is increased as a result of relocation, tenants should try and negotiate no increase in rent and/or prorata share.