Lease Summary Services

One of the services I offer my clients is a lease summary.  As you gain more experience with Lease in the commercial real estate industry there are lots of little items you can pick off that may or may not be negotiable or key dates you need to keep track of within the Lease.  I have attached a lease summary I have recently completed for a client outlining some of the issues the tenant needs to be aware of prior to his renewal at the end of 2010 as an example.

LEASE SUMMARY
for
ABC INC.(“Tenant”)
and
BIG MEAN LANLDORD(“Landlord”)

Rentable Area of Premises 1,995 sf (section 1.1 (f) page 1)

Commencement Date January 1, 2006

Expiry Date: December 31, 2010  (section 1.1 (g) page 1)

Basic Rent Years 1-5                     $8.00 per rentable square foot (section 1.1 (i) page 1)

Rent Deposit $4,283.53 first month’s rent and GST  (section 1.1 (j) (i) page 1)

Security Deposit $4,461.42 without interest (section 1.1 (j) (ii) page 2)

Default Rate Prime plus five percent per annum (section 3.1 (n) page 3)

Relocation The Landlord shall have the right from time to time, on not less than 60 days’ Notice, to relocate the Premises to other premises within the Building having approximately the same area. The Landlord shall provide approximately the same quality of Leasehold Improvements. The Landlord shall cover the cost of moving, reprinting stationary and supplies and disconnection and connection of telephone, computer equipment and systems. (section 8.6 page 16 & 17)

Alterations by Tenant (section 9.2 page 17) The Tenant may from time to time at its own expense install Leasehold Improvements and alter existing Leasehold Improvements provided that:

1. a. All Alterations shall require the prior written approval of the Landlord;

1. b. The Tenant shall furnish the Landlord with two complete sets of professionally prepared working drawings. The Tenant shall pay to the Landlord, on demand, the costs of the examination of such drawings plus an administration fee of 15% for such costs.

Removal of Improvements and All Leasehold Improvements shall immediately

Fixtures become the Landlord’s property.  The Tenant shall at its cost, remove such Leasehold Improvements, wiring, cables and related devices and restore the Premise to the then current base building standard at the expiry of the Term. (section 9.3 page 18)

Permitted Use The Tenant shall continuously use the whole of the  Premises only as a business office and consulting office. (section 10.1 page 19)

Tenant’s Insurance Commercial general liability insurance not less than $5,000,000.00 in respect of each occurrence. (section 12.1)

Transfers The Tenant shall not enter into, consent to, or permit any Transfer without the prior written consent of the Landlord. The Tenant shall pay to the Landlord reasonable charges and all costs incurred in respect of the proposed Transfer. (section 12.1)

(e) The Landlord at the time has, or will have in the next three month period, other premises in the Building suitable for leasing to the proposed Transferee;

(f) The basic and additional rent payable by the Transferee is less than the Basic Rent and Additional Rent payable by the Tenant; and

(g)   The proposed Transfer is (i) an existing tenant of any building owned or managed by the Landlord or any of its affiliates within the same market area as determined by the Landlord; (ii) a consulate, embassy, trade commission or other representative of a foreign government; (iii) a government , quasi-government or public agency, service or office; or (iv) a call centre, school or telecommunications centre.

Tenant’s Notice, Landlord’s Right to Terminate (section 12.2 page 23, 24) The Landlord shall, within 15 days after having received such Transfer Notice and all requested information, notify the Tenant either that:

1. It consents or does not consent; or
2. It elects to terminate this Lease

Overholding The Tenant has no right to remain in possession ofthe Premises after the end of the Term. Should the Landlord provide consent to remain in the Premises after the end of the Term, the Tenant becomes a month-to-month tenant, at a monthly Basic Rent equal to 150% of the monthly amount of Basic Rent payable during the last month of the Term. (section 16.3 page 29)

Option to Renew Tenant gives the Landlord not more than twelve  (12) months (December 31, 2009) nor less than nine (9) months (March 31, 2010) notice prior to the expiry of the initial Term. Tenant will have the right to extend the Term for a further period of five (5) years. (Schedule “E” 2)

Parking Tenant has two (2) parking stalls in the Building at $150.00 per stall per month. Monthly rent is subject to change from time to time. (Schedule “E” 3)