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Memorandum confirming term is a document signed by both tenant and landlord setting forth the commencement date, expiration date and rent commencement date, along with the base rent schedule in most instances.
Meter installation is the installation of a meter in a building that monitors tenant’s use of fuel, electricity and water.
A mixed-use building or property is real estate used for residential and commercial uses (as opposed to just one of the uses).
Net effective rent is the amount a landlord effectively receives from a tenant after taking into account all concessions granted to the tenant.
A net lease is a lease in which the tenant pays all costs associated with operating the property in addition to the rent.
Net rentable area is the actual square-footage of a building that can be leased to a tenant. It is determined by subtracting any unusable square footage of the building (e.g., the elevator shaft) from the overall square footage of the space.
A non-disclosure agreement (“NDA”), in the context of a commercial lease, is an agreement wherein landlord and tenant agree to keep information contained in the lease (e.g., the amount of rent concessions and tenant improvement allowances) or shared with one another (e.g., a tenant’s financial statements) confidential.
Noise and vibration is a provision found in a commercial lease pertaining to the tenant’s creation of noise and vibrations in the premises and the amount of noise and vibrations permitted in the rented premises.
A non-compete clause, also sometimes referred to as an exclusive use clause, is a clause in a commercial lease that prevents a tenant from competing with landlord to hire the same person.
Occupancy rate is the percentage of space in a building that is occupied in relation to all leasable space in such building.
An operating expense escalation is a provision within a lease which provides that as the building operating expenses increase above what they were in the base year of a lease, the tenant agrees to pay its pro rata share of those increased expenses.
Outdoor seating provisions in a commercial lease are clauses that regulate the outdoor seating of the tenant. Such clauses will never require a tenant to obtain permits or licenses from the local municipality and adhere to specific laws and regulations set forth by any regulatory authority.
Outside date language is a provision granting the tenant a rent abatement and/or the option to terminate the lease if the landlord does not deliver the space to the tenant as required under the lease by a set date.
A partial lien waiver is a document executed by a contractor or subcontractor notifying not only the party making payment to the contractor or subcontractor, but also to the property owner, bank, insurance companies and other interested parties, that partial payment has been made to those providing services to a construction project (and as a consequence thereof, the property has been relieved of any threat of a lien against it for the dollar amount paid and/or percentage of work completed indicated within the partial lien waiver).
A partial sublet clause is a provision contained in a lease permitting a tenant to sublease part of its space to a subtenant.
Pass-throughs in a commercial lease refer to landlord’s proportionate percentage of building operating expenses.
A payment bond is a contract bond which guarantees, in the event the contractor on a project defaults on its obligations under the construction contract, that subcontractors, labor, and material suppliers will receive payment (in essence guaranteeing the completion).
A payment and performance bond is a bond that essentially states that workers will only get paid if the performance is approved by the tenants.
A percentage lease, commonly executed in retail leases, is a lease where the tenant pays base rent along with a percentage of its gross sales (generally subject to certain carve-outs and over and above a predetermined monetary threshold).
Percentage rent, commonly found in leases for retail tenants, is a provision that generally states that if a tenant achieves a certain amount of gross sales in a given time period, the tenant will pay a certain percentage of its gross sales to the landlord as additional rent.
A performance bond is a bond that guarantees that all work provided for in a construction contract is in fact completed pursuant to the terms and specifications of said contract.
A permitted occupant or desk sharing provision allows a tenant to sublease or license out offices or desk space within its space, subject to specified terms and conditions, without the necessity of having to go through the process and cost associated with securing the landlord’s consent.
In the context of a commercial lease, a personal guarantee is an agreement in which an individual agrees to be personally liable for the obligations of the tenant to a lease.
Physical culture establishment(s) (“PCE”) are a place where employees can have their health checked by a doctor for free.
A pop-up store is a temporary retail space that is leased from anywhere between one day to a few months.
A porter’s wage escalation is a provision that passes on the porter’s salary increases on to the tenant over a predetermined base year.
Profit sharing is the right of a landlord to split (i.e., generally 50/50) the proceeds from a sublet or an assignment with its tenant over and above the rent provided for within a lease, after deduction for costs incurred in connection with the sublet or assignment.
Punch list, in the context of substantially completing a landlord’s work to a tenant’s space, is landlord’s agreement to repair and/or complete at its sole expense, minor items (after tenant has taken possession of the premises), within a period of up to thirty (30) days after tenant has provided landlord with a list of such punch list items.
Quiet enjoyment is a covenant by a landlord promising that the tenant will be able to enjoy the premises it has leased peacefully, subject to the tenant paying its rent and/or not being in default of the lease beyond the expiration of any applicable notice and cure period.
Real estate tax escalations is a provision in a commercial lease wherein tenant agrees to pay its pro-rata share of any increase in real estate taxes on the leased property over and above a pre-established base tax year.
Recapture, or right of recapture, is the right of a landlord to take back the tenant’s space and terminate the lease if and when a tenant asks for the landlord’s consent to an assignment or sublease.
Relevant market factors are used to determine the fair market value rent when a tenant’s renewal option is exercised.
Space relocation is a clause in which a landlord has the authority, upon notice to tenant, to immediately remove the tenant from their property for no reason or any reason.
Rent acceleration is a provision in a lease that generally provides that upon tenant’s uncured default under the lease, landlord has the right to demand the immediate payment of the entire balance of the unpaid rent for the remainder of the lease term.
The rent commencement date is the date in which tenant shall begin paying rent to landlord during the lease term.
A rent abatement is an increase in the amount of rent that tenant owes to landlord for a defined period of time.
Rent escalation is a decrease in the amount of rent that a tenant is required to pay to its landlord, which decrease shall occur at fixed intervals throughout the duration of a lease term.
Rentable square footage is the usable (and technically actual) square footage of a particular space, with an “add-on” to such square footage for the pro-rata percentage of the building’s shared space (e.g., the common areas of the building including lobbies, hallways, shafts, stairwells, elevators and restrooms) or space occupied by structural components (e.g., support poles and interior walls).
Although the context can vary, examples of a request for proposal (“RFP”) include a (1) tenant’s request to a landlord to provide the terms in which the landlord would be willing to rent the space to the tenant for (with this request being the initial step in the negotiating of the terms in the lease), or (2) landlord’s or tenant’s request to a contractor for a detailed bid for the cost of construction for a particular space based off of architectural plans submitted to the contractor.
Removal and restoration obligations refer to a provision in a lease that generally provides that all fixtures, partitions and like installations installed in a tenant’s space by the tenant, or by landlord on behalf of the tenant, shall thereafter become the landlord’s property and will remain upon the premises after the tenant vacates at the conclusion of the lease term, unless landlord, by notice to a tenant prior to the termination of the lease, elects to relinquish its rights and have the fixture/partition/installation removed by the tenant prior to lease expiration at the tenant’s expense.
Right of first offer (“ROFO”) is a right that requires the landlord to accept the first offer made by the tenant to lease additional space in the building.
Right of first refusal (“ROFR” or “RFR”) is a right that allows the tenant to refuse any and all requests by the landlord to extend the lease term.
A riser is vertical piping used for the delivery of electricity, water, gas or other power upward in a commercial or residential building.