Top Tips for Negotiating Commercial Leases - #10 Engage an Attorney

By
Commercial Real Estate Agent with REATA Commercial Realty, Inc. Texas 537349

You wouldn't go to court without an attorney, but you are likely to end up in court a lot faster if you don't engage an attorney when drafting legal documents. More importantly, if you don't use an attorney when negotiating the lease language, your lease will be one-sided and heavily weighted to the landlord's advantage.

Leases are generally written by landlords and you have to use the landlord's form or they won't lease you the space. Only in rare situations with extremely large companies will landlord's agree to use a lease form of the tenant's chosing.

So engage an attorney to review the lease document on your behalf. While the tenant rep broker should review the lease language and should weigh heavily in the lease language negotiations, he doesn’t replace the need for an attorney. They approach the lease document from different perspectives and should act as a team improving the lease to the tenant’s advantage. Both are vital and neither replacese the other.

For example, an attorney is going to be critical at protecting the tenant from legal liabilities while the tenant representative should review the lease from the perspective of the practical landlord/tenant relationship.

So how do you know what attorney to hire? First, make sure it’s someone with extensive commercial real estate leasing experience and not just a general attorney. Just because someone knows how to write a will or incorporate a company, doesn't mean he or she is an expert in commercial lease negotiations. Your attorney should know what is acceptable, reasonable and typical in the market.

In addition, it's best to hire someone locally...or at least from within the state. I wouldn't recommend using an attorney from Baton Rouge, Louisiana to negotiate a lease in Plano or Frisco, Texas. Laws vary from one state to the next and your attorney must know those nuances.

Ultimately, your tenant rep should be able to refer you to a good real estate attorney with whom he has done business. But once you pick an attorney, be sure to confirm when he/she will commit to getting the review done and how many hours it should take. A great billable rate per hour may be attractive, but if you are billed for twice the hours or it takes 2 weeks to get the comments, it may cost you far more than you think.

Finally, you must instruct your attorney as to the degree to which you want the lease reviewed. Do you want him to hit the most likely big picture issues or do you want every paragraph redrafted. The size of your space relative to the overall size of the property will make a huge difference in the landlord's willingness to negotiate. The more changes requested, the more it costs both parties in legal fees.

Remember, time kills deals. Don't let your attorney be a deal killer. 

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_________________________________________________________________________

Bob Gibbons

REATA Commercial Realty, Inc. | 1211 E. 15th Street, Plano, TX  75074

972-468-1946 p | 866-439-8015 f | 972-984-8580 m

bob@texastenantrep.com | www.TexasTenantRep.com

 

 

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