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Subject to certain exceptions, a tenant’s proportionate share of real estate taxes is typically based on the rentable square footage of the premises divided by the rentable square footage of the building.
Tenants should secure language that if the amount of taxes payable during the base year is reduced by final determination of legal proceedings, settlement or otherwise, the reduction shall be disregarded for the computation of tenant’s percentage of taxes payable under the lease.
A letter of credit security deposit creates significantly greater risk to a landlord than a cash security deposit.
At its most basic level, a good guy guaranty is a document wherein a tenant’s principal or principals personally guarantee that the rent for the entire term of the lease will be paid, even if the tenant has surrendered the space and paid all rent through the date of surrender.
Tenants should negotiate an “exit strategy” that would release the guarantor from a good guy guaranty upon assignment of the lease, if the assignee’s principals sign a replacement good guy guaranty.
“RSF” stands for reusable square footage.
Among an estoppel, tax abatement, assignment and subletting, and repair and maintenance provision, the most important clause to negotiate a tenant’s potential exit strategy from a lease would be the assignment and subletting provision.
The letter of intent is a binding document that plays an integral part in setting the playing field on which the lease will be prepared and negotiated.
In response to a landlord’s ability to recapture or leaseback the premises in the event that a tenant attempts to sublet out its space or assign its lease, the tenant should negotiate that such landlord right shall not apply to transfers to a related entity of tenant, a permitted transferee, or for permitted occupants.
A tenant can generally limit the cost of its electric bill by (i) incurring the charge directly from the local utility (i.e., by “going direct”) or (ii) paying the landlord for electricity used as measured by a sub-meter installed for the premises at landlord’s actual cost without markup from the landlord.
When paying a landlord for electricity on a rent-inclusion basis, tenants should request that electrical services through the electrical outlets in the premises be supplied 24/7/365.