It’s a new year and some of you landlords out there are probably signing up some new tenants. Here at Dean Sperling Law we represent landlords in all types of legal matters involving leases. Here are a few good tips to guide you.
- Be sure that you investigate the business entity that is signing the lease if it is NOT an individual. Get copies of corporate formation documents and LLC operating agreements. Check with the Secretary of State to be sure you have a real entity and the correct name. (this due diligence will help you sleep better and night and make sure you’re not accidentally working with Al Qaeda.)
- If the lessee is not an individual, obtain a personal guarantee. (You have to know with whom you are in business here).
- Be sure that you have the correct language in your lease concerning security deposits. There are statutes that limit your ability to use the deposit for future rents if there is a breach. You want to have these provisions waived in the lease.
- Be sure that you obtain a sufficient security deposit that meets with the length and complexity of the lease. Unlike residential leases, the amount of the security deposit is a negotiated term in a commercial lease. If the rent is $15,000 a month, a one-month deposit is probably insufficient.
- Be sure that you have prohibitions on assignment/subleasing without the landlord’s prior written consent. Reasonable standards as to what is expected are enforceable so long as they are in the lease and are clear. And NEVER release the original tenant on any assignment/subleasing.
Signing leases with new tenants can be tricky. We hope you found this post helpful. If you have any specific questions, we are here to get it resolved for you. Just call or e-mail and we’ll arrange a convenient time to discuss your specific new tenant lease matter.