It’s time to make a list of things we want to accomplish this year.   Along with exercising more and eating less, for those of us in the commercial real estate industry, now is a good time to review your commercial lease agreement.  Whether you’re a landlord or a tenant, inevitably there will be an item or two in your lease that needs updating, especially if your lease is more than 10 years old. Below are items that I frequently discover missing from or not properly addressed in lease agreements.

If you’re a landlord, make sure that your lease includes the following:

1. A properly written express disclaimer of the implied warranty of suitability;
2. A properly written waiver of representations outside the lease language that includes a clear and unequivocal intent by the tenant to disclaim of reliance;
3. A waiver by the tenant of the right to protest ad valorem property tax assessments;
4. A detailed list of what expense items will be included in and excluded from common area maintenance or operating expenses;
5. A robust force majeure clause that includes pandemics and government shutdowns and that excludes the inability to make a monetary payment as an event of force majeure; and
6. A prevailing party clause to allocate liability for attorney’s fees to the non-prevailing party in the event of a dispute over the lease.

If you’re a tenant, make sure that your lease includes the following:

1. A right to audit the landlord’s end of year triple net expense reimbursement records;
2. If the lease disclaims the implied warranty of suitability, an exception for latent defects;
3. A right to remove your trade fixtures from the premises when the lease ends;
4. A right to make alterations to the premises that are less than a certain amount (such as $10,000) without landlord’s consent;
5. Updates as necessary to repair and replace maintenance obligations (for example, if the tenant is required to maintain the HVAC systems but doesn’t use all of them, then the tenant should get a written agreement from the landlord to exclude such unused HVAC systems from the maintenance obligation);
6. Updates as necessary to any exhibits that outline the premises if the square footage of the premises has been expanded or reduced;
7. A robust force majeure clause that includes pandemics and government shutdowns; and
8. A prevailing party clause to allocate liability for attorney’s fees to the non-prevailing party in the event of a dispute over the lease.

A commercial real estate attorney can help you incorporate any of these items into your lease agreement by an amendment either at the next renewal of the lease or at any time so long as both the landlord and tenant agree to the amendment.