Many commercial tenants and landlords negotiate vigorously on lease length, renewal options, security deposits, and leasehold improvements. However, they often fail to include crucial terms that ensure they get the most benefit out of a lease. In this guide, landlords and tenants will learn which issues to focus on when negotiating Chicago Commercial Landlord Service.
The Other Party
In a landlord’s case, it is important to determine whether the potential tenant will be able to meet their obligations. Unless the new tenant is an established business owner, a guarantee is essential. A tenant owning a LLC or a corporation has little incentive to meet his or her obligations because they’re not personally liable, and the landlord’s profits may disappear if the tenant walks away. The landlord and tenant may compromise by limiting the time in which the guarantee is enforced.
On the other hand, a tenant and his or her attorney should perform a title search to confirm the property’s ownership and to determine whether the landlord is in financial trouble. If there are liens on the property, the tenant may lose their lease interest via foreclosure, and the landlord may be unable to maintain common areas or outfit the space according to the lease’s terms.
Negotiate the SNDA Agreement Early On
Most lenders ask important tenants to sign SNDA or subordination, non-disturbance, and attornment agreements to ensure the superiority of their mortgage to the lease. A landlord should furnish a copy of the SNDA to the potential tenant early in the lending process. Other than subordination, a lender wants tenants to notify them of defaults and recognize them as the landlord.
Recording a Lease Notice
Tenants should record a lease notice on the land record in the town where the commercial property is located. The lease notice offers evidence of the tenant’s interest in the property and it may encourage subsequent lenders to recognize the tenant’s interests in the event of a foreclosure.
There are numerous other issues to consider in commercial leasing depending on the property and its need for improvement. It is very helpful for a Chicago Commercial Landlord Service to address all these issues before the lease is signed. For commercial leasing assistance, contact the firm of Starr Bejgiert Zink & Rowells today. Like us on Facebook.
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