When the tenant requests a lease from the landlord, the ball is put into play, and the real action begins.

The first rule in this game is that there is no such thing as a standard lease.  The second rule is to always keep your eye on the language and terms used in the landlord’s lease.  While some things may be boilerplate, a landlord will have his attorney prepare the lease in his own fashion.

The first thing you should do upon receiving the lease is to check to make sure that the basic business terms of the lease are included accurately.  Don’t let the landlord throw you a curve by misstating the business terms.  No matter how specific the language of your letter of intent or how detailed your preliminary proposals are, they can never reflect all business terms of a complete lease document.  When in doubt, make sure that they spell it out – every last item.

Some of the additional, yet to be negotiated, business issues that might appear are:

• Late payment penalties – penalties a tenant may incur if rental payments are late.
• Sublease and assignment – the rights of the tenant to sublease or assign the space to another tenant.
• Holdover penalties – penalties that occur if the tenant remains in the space after lease expiration.
• Detailed escalation language – the details of escalation charges.
• Building hours of operation – hours the landlord provides building services such as heat, air-conditioning, etc.
• Building services spelled out in detail – hours of and quantity of building services provided by the landlord.
• After-hour charges – charges for heating, ventilating and air-conditioning after normal hours of operation and the notice required to obtain it.
• Alteration approvals – steps required to obtain landlords approval for alterations required by the tenant.
• Repairs – who is responsible to make repairs to the space and what remedies are available if they are not made.           There is no legal distinction between a business term and a legal term. It is however, an important distinction to make. Business terms comprise dollar and cents issues, such as rent, tenant finish allowances, the length of lease, rent commencement, etc.          A good lawyer will listen carefully to your concerns and priorities and will not forget that it is you, the tenant, who makes the final business decisions and will live with the consequences of those decisions. The right attorney will provide you with the professional distance you need to help keep your emotions out of the lease negotiations.          After some back and forth, the landlord’s and tenant’s attorneys may identify a half dozen or so points on which they do not agree. Final lease negotiations can occur by conference call or face-to-face. Face time is preferable. Landlord and tenant and their lawyers, brokers and consultants may all need to be in attendance to finish up the negotiations if there are really tough points to iron out.          Secret No. 21 — A good lawyer will save you considerable time and money now and in the future. While a lawyer’s ability to modify the lease is dependent upon your business leverage, the right lawyer will focus on the essentials and educate you about business risks.
•           There is one more expert who should review the language of the lease, your insurance carrier. You must have him review the insurance liability and destruction provisions in the lease to make sure that your liability insurance will protect you and that the coverage in your policy meets the limits required in the lease.
•           The job of a lawyer is to keep you out of court and prevent costly legal errors. A lawyer’s style should complement yours. A good lawyer will keep the personalities out of the process and keep the negotiations moving.
•           Lawyers have different methods. One lawyer might mark up the lease with a black marker, while another might write a letter to the landlord’s attorney elaborating on the points of concern. Some attorneys handle the points in a phone call. Today’s email allows the attorney to send out long drafts with black-lined comments in short order.
•           Legal terms are everything else. There are many legal issues that attorneys focus on that may be absolutely essential to your business survival, such as what happens if the landlord does not provide essential services or the building gets damaged by fire. To the laymen, some legal points seem to be arcane, esoteric and generally pretty hard to get worked up about. An example might be the eminent domain clause, by which the government has the right to seize your office during time of war. It is difficult to be enthusiastic about the credit that may be received from the government for seizure of the property and who gets to keep it.
•           The lease should now be sent to your attorney for review of the legal and business terms. Your legal counsel is your first line of defense in protecting your business against the unexpected and unpredictable things that can happen when you lease space. Your attorney is there to ensure that you are legally protected. Once the attorney review is completed, negotiations will take on a new phase — attorney-to-attorney negotiations. Your attorney has a duel focus. He must make sure that your interpretation of the business terms are expressed properly in the lease, and he must provide language to reflect the legal terms of the lease.