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Lease Negotiation Notes

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Lease Negotiation Notes

Lease Negotiation Notes

Martin Moser

These set of notes provide a guideline of topics that should be discussed during a commercial lease negotiation. Many of the notes presented here state a suggested position, but all topics are negotiable between the Tenant and Landlord.

Initial Lease Information

  • Lease Date
  • State Landlord
  • State Tenant
  • The landlord should use the tenant’s full, legal name – not a trade name or a casual shorthand name



  • State Address of the “Building”
  • The sentence defining the “Building” is intended to use the street address.
  • State the location of the “Land”
  • The sentence defining the “Land” is intended to use the legal description of the site, such as a block and lot or a metes and bounds description.
  • Together the “Building” and the “Land” are collectively referred to herein as the “Property”.


  • A clause is typically used to explain that the Tenant desires to hire and lease space in the Building, and that the Landlord is willing to demise and lease space in the Building to the Tenant, upon the terms and appurtenances thereto and collectively referred to herein as the “Property”.


  • Consideration of $1.00 is used to acknowledge, legally bind, and agree to the remaining terms of the lease.

Article 1: The Premises

Section 1.1 Premises

  • States the suite number and floor number in a building
  • States the rentable square footage of the space
  • All measurements of square footage should use the BOMA ANSI Z65.1 1996 Standard Method of Measurement
  • What are the terms for re-measurement? Tenant and Landlord need to discuss and decide.
  • Show the premises graphically on a floor plan by cross hatching the area

Section 1.2 Right to Relocate

  • Should Landlord have the right to relocate Tenant?
  • Who should pay for the relocation if initiated by Landlord? How much?
  • Landlord should provide 60 days notice to Tenant if planning to relocate
  • An amendment should be created if Tenant is moved.
  • What should the terms be of the Amendment (rent etc.)?

Article 2: Lease Term

Section 2.1 Term

  • Term of the lease should commence on the Lease Commencement Date
  • The lease year shall mean the period commencing on the Lease Commencement Date and continuing for any partial calendar month in which the Lease Commencement Date occurs and for twelve full calendar months thereafter. Each successive 12 month period thereafter during the Term shall constitute a subsequent “Lease Year”, except that the last Lease Year shall end on the expiration of this Lease.
  • Landlord should not be liable if it cannot turn over space due to no certificate of occupancy, a hold over tenant, non completed repairs or improvements.

Section 2.2 Lease Commencement Date

  • If Tenant does build out: Lease Commencement Date should be a predetermined date or the date on which Tenant commences beneficial use of the Premises whichever occurs first.
  • If Landlord does build out: Lease Commencement Date shall be the earlier of the date Tenant begins to move furniture and furnishings into the Premises or the date on which Landlord substantially completes the initial Tenant Improvement work.
  • There still may be uncompleted work that does not materially affect Tenant’s ability to beneficially use the Premises
  • If Tenant does build out determine the date from which Premises is turned over to Tenant.
  • If Landlord does build out determine the date from which the Premises is ready for occupancy by Tenant.
  • After Lease Commencement Date, Tenant and Landlord need to execute Exhibit B: Certificate of Lease Commencement Date and Expiration of Lease Term.

Section 2.3 Extension Option

  • Tenant is not allowed to be in default if it chooses to take advantage of an extension option
  • Tenant shall be obligated to notify Landlord within a minimum and maximum period of time prior to the expiration of the initial term.
  • Any lease extension should be upon the same covenants, agreements, provisions, terms and conditions as the initial Lease Term.
  • The Annual Rent during the extended Lease Term should either be:
  • Fixed Rent
  • Fair Market Rent

Article 3 Rent

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