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Roof licensing is the licensing of an unused portion of the roof of a building to a tenant or a third party for profit (e.g., to a cellular provider for its antennae).
Roof provisions in a commercial lease describe the maximum rent that the landlord can raise tenant’s rent to during the term of the lease or any renewal thereof.
The scaffolding provision is a clause within a lease generally granting a tenant the right to install scaffolding and/or a sidewalk bridge on or adjacent to the building.
A security deposit reduction is a provision in a lease permitting the amount of the required security deposit to decrease over time subject to specified benchmarks and conditions. This is also known as a “burndown of security deposit” or “burndown of letter of credit.”
Shell space is a space that is finished, generally having all portions complete and furnished.
Shopping center provisions are provisions of a lease that are generally included by a landlord to maintain control of the tenant mix of the shopping center and/or to control how a tenant may operate its business in the demised premises.
A sidewalk provision granting the tenant permission, subject to certain conditions and restrictions, to use the adjacent sidewalk is generally found more often in an office lease versus that of a retail lease.
Signage is a clause that outlines the rights of a tenant in regards to the ability to place signs on its premises, the building and/or the property.
Soft cost(s), although associated with the use of a space and/or the building itself, is an expense not considered to be a direct “hard” construction cost. Examples of soft costs include architectural, design and legal fees; costs to obtain permits; real estate commissions; movable furniture and furnishing costs; computer data equipment costs; telephone systems costs; and advertising, insurance and moving costs.
Space plan (or design plan) is a plan which lays out, hopefully in an optimum nature, how the interior of the demised premises is going to be laid out before constructing the build-out.
Specialty alterations go beyond “ordinary” alterations, such as raised floors, vaults, filing systems, internal staircases, dumbwaiters, pneumatic tubes, vertical and horizontal transportation systems and any alterations which are essentially structural in nature or penetrate any floor slab in the premises.
Storefront is the “face” of a store on the ground floor of a commercial building.
Sublet is an agreement wherein a tenant leases all or a part of its space during the term of its lease to a third party.
A submeter or submetered utility is where an owner of a building purchases the utility (e.g., electric current or water) for the entire building and charges the tenant, based on landlord’s actual cost or quite often on a cost standard higher than landlord’s actual cost, for its consumption by way of readings measured by a “submeter.”
A submeter administrative fee is the fee a tenant charges a landlord to read and/or maintain a submeter(s) installed in the tenant’s demised premises.
A submeter installation is when a submeter is installed in a demised premises to measure a tenant’s individual electric or water usage.
Subordination and non-disturbance attornment agreement (“SNDA”) is a document wherein the lender will agree that the tenant’s occupancy will remain undisturbed, notwithstanding the foreclosure of the landlord’s mortgage or termination of the landlord’s ground lease.
Subordination is a clause which states that when a landlord’s mortgage is foreclosed on by its lender or a ground lease against the building is terminated by a ground lessor due to a landlord’s uncured default, the lender or the ground lessor would have the option to recognize the tenant’s lease and have the tenant attorn to it, or alternatively, terminate such lease.
Substantial completion, in a commercial lease, is the stage of construction when the work agreed to be performed has been entirely completed and there are no minor or insubstantial details of construction, demolition, mechanical adjustment, decorative items and/or other “punch list” items to be completed.
Substitute space is the alternative space a landlord provides a tenant when relocating a tenant’s space during the term of the lease.
An example of a provision considered to be a “sunrise provision” is an early termination clause wherein the party with the right to terminate the lease before the end of the full term can only do so an agreed upon number of years after the commencement date.
A sunset provision is a provision of a lease which only becomes effective after a specified period of time or as of a certain date.
Supplemental HVAC is generally installed by a tenant (or a landlord on behalf of the tenant) at the tenant’s sole cost and expense, and is generally installed in conference rooms, server rooms and/or partner offices.
A tap in fee is the charge for a tenant to connect a utility within its demised premises to the building’s system. Sophisticated tenant advocates will try and negotiate for no tap-in fee, a reduced rate and/or payment of the fee in monthly installments over a one (1) to two (2) year period.
A temporary certificate of occupancy is a document issued by the local building department that temporarily enables legal occupancy or partial occupancy of a building or space before the construction or renovation project is fully completed, provided that the designated portion to be occupied is sufficiently completed so that it may be safely used for the purpose intended.
A tenant change order is a request by a tenant for a “change” to be made to the permitted use of the premises.
A tenant delay is an act by the tenant that prevents the landlord from completing a requirement (e.g., completion of landlord’s work) or providing its consent under the lease. As a consequence of a tenant delay, it may extend the time a landlord has to complete its work, excuse its breach and/or allow the lease commencement date to be accelerated.
A tenant extra work clause states that the landlord must be reimbursed for extra profit made by the tenant if they do extra work in the space.
A tenant improvement allowance is the agreed upon amount, often expressed as a specified sum or amount per square foot, that a landlord is willing to (1) spend on the build-out of a tenant’s space or (2) contribute financially to a tenant for the tenant’s construction of its space.
A tenant work or tenant alteration clause states the myriad of rules, terms and conditions under which a tenant may perform alterations within its space.
Termination rights are the rights by either a tenant or a landlord to bring the lease term and contractual relationship between a landlord and a tenant to an end prior to the pre-established lease expiration date.
“Time of the essence” is a phrase in a contract essentially meaning that performance by one party at or within the period specified in the contract is necessary to enable that party to require performance by the other party, so that failure to act within the time required constitutes a breach of the contract.
Trade fixtures are personal property and equipment of the tenant used in connection with the conduct of its business (which may or may not be attached to the leased property), but which are generally removable by the tenant at the end of the tenancy.
A triple net lease (“NNN”) is a lease wherein, from and after the lease commencement date, the landlord shall receive a net return from the premises (or the entire building) equal to the base rent, without deduction for any expense or charge for the premises or the building (except as may otherwise expressly be provided for (if at all) in the lease). Furthermore, the tenant will be required to pay all expenses, of every kind and nature, relating to or arising from the premises or building, including real estate taxes and expenses arising from the leasing, management, operation, maintenance, repair, use, or occupancy of the premises or building (and all construction relating to thereto), except as otherwise expressly provided for in the lease.
Turnkey is when the contribution by a landlord covers the entire cost of the build-out, and is generally referred to as landlord delivering the premises to a tenant “turnkey.” A space can be delivered “turnkey” when the landlord builds out a space according to specifications which have been agreed upon by a tenant and landlord, at its sole cost and expense, such that the tenant can figuratively move into the space with nothing more than its files, computers, furniture and toothbrush.
Unamortized cost is the actual cost of an asset or concession less the depreciation or amortization of such item, generally on a straight line basis.
Unamortized cost reimbursement, in the context of a commercial lease, is the unamortized amount to be reimbursed by a landlord or tenant upon the occurrence of a certain event (e.g., upon the surrender of the space by a tenant prior to lease expiration or upon the exercise by landlord of an early termination right).
Usage restrictions are restrictions imposed by a tenant on a landlord which limit the permitted use of a building, shopping center and/or premises.
The use clause is a provision in a lease specifying how a tenant can use the utilities in the tenant’s space.
Useable square footage (“USF”) is the actual wall to wall space within the premises or a building.
Utilities are the services required to operate a business in a space such as electricity, water, air conditioning, heat, etc.
A “vanilla shell” or “vanilla box” is generally considered to be a space with a sparsely furnished interior (e.g., with basic plumbing, heating, HVAC, electrical outlets, a concrete floor, sheet rocked walls and in most cases a restroom or rooms).
A warm shell is an empty building or space that usually has minimally finished interior including walls, ceiling, and flooring, with basic services connected such as plumbing, heating, air conditioning, restrooms and lighting.