Press & News

Ira Fierstein Published in Commercial Leasing Law & Strategy
09/25/2006

Ira Fierstein’s article "Opportunities for Landlord Abound When Tenant Exercises Renewal Option," in the September issue of Commercial Leasing Law & Strategy, emphasizes the importance for a landlord to update a tenant's original lease, as opposed to treating the tenant's notice letter as a lease renewal. While landlords may be inclined to save time and effort, it's important for them to incorporate the necessary changes to conform to market conditions.

Items for landlords to include in lease amendments include:

• Reflection of any change in the parties of the original lease. "Often, there have been assignments, mergers or name changes, and the parties to the original lease are not the parties who need to sign the renewal documents. The amendment should trace the chain of transfers and explain how the parties ended up being who they are."
• Confirmation that certain events or provisions (like construction obligations) have already occurred or are no longer necessary;
• Acknowledgement if tenant is exercising a renewal set forth in the lease, and confirmation of how many remaining renewal options, if any, remain;
• Indication of any change in tenancy mix or occupancy level for building or shopping center;
• Confirmation of landlord's limitation of liability;
• and change of address information for landlord or tenant. 

Ira cites the incorporation of  estoppel language in the lease as the most important consideration to a landlord in drafting an amendment for a lease extension. "Often, a tenant will object to this provision but if worded carefully, the tenant is likely to acquiesce and allow the landlord to add this protection," which confirms that the landlord has no outstanding obligations, has satisfied all conditions and is not in default under the terms of the lease. 

"If drafted properly, a lease extension agreement can do more than just outline the financial terms of the renewal period. It can update information, modify or remove troublesome lease provisions and estop the tenant from later claiming rights against the landlord. Care should therefore be taken to review the original lease to provide for a thorough and complete overhaul necessary to close any loopholes that otherwise may exist in the original lease documentation."