As most readers will know, there seems to be a limitless variety of leases, each with its own special concerns and potential pitfalls. Let’s name a few (bearing in mind that terms may overlap – or may describe much the same thing by different names):
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The parties to a lease agreement often are one landlord/lessor and one tenant/lessee. However, it is not unusual for other parties to be involved. For example, there may be guarantors who back up the promises of the parties. The lease may also provide for assignment to an assignee, or for the sublease of a portion of the leased property (or all of the leased property for a part of the term) to a sublessee. There may be a lender to involved in a leveraged lease transaction.
Parties to a lease often need to address the question of who takes care of what. For example, what type of insurance is required to protect both parties, and who is responsible for maintaining it. Who is to take care of the roof? The parking lot, which will need clearing, striping, new asphalt, etc.? What happens if the chillers break down? Who will receive the tax bill and make sure it is paid? What about liability for injuries on the leased property or in the common areas? A critical area of concern when environmentally hazardous materials will be present is who bears the responsibility for clean-up in the event of a spill or leak? Is there landscaping that must be maintained? As with the other lease provisions we’ve talked about, there is a great deal of variability from lease to lease as to the matters that must be thought through and taken care of in the lease.