Ill-Suited Lease Forms Cost Tenants
Strip mall or single-tenant building landlords often rely on pre-printed lease forms in an effort to keep costs down and simplify leasing. For some properties this works well enough, but only where the type of tenants are well suited to the lease form. Many landlords attempt to use an industrial tenant lease form for a restaurant, for example, or a single-tenant lease form for a multi-tenant building, resulting in an ill-fitted lease where the tenant suffers. In an industrial tenant lease, such as the AIR Industrial/Commercial Tenant Lease form, the tenant typically pays for any malfunction or failure of the HVAC system after the first 6 months of the Lease, and all "other elements" of the premises after 30 days. In addition, this form requires the tenant to share in the cost prorata of any capital improvement for the entire Project or Building. Particularly if this is small strip mall with two or three tenants, this cost could be enough to put the tenant out of business. Similarly, in a single-tenant lease form, the tenant is often required to replace and maintain all of the building systems, roof, exterior of the building, etc. Tenants of a multi-tenant building with shared building systems, roof and building exterior should share such maintenance and typically, the Landlord would replace such items (perhaps with the cost amortized over the useful life) and pass portions of the cost through to all of the tenants annually. An inappropriate Lease form could easily cost a tenant thousands of dollars over the lease term.
