Burt M. Polson - Commercial Real Estate Broker

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Filtering by Tag: lease

Understanding the lease - part six

We have covered significant ground in this series of articles on leasing. In this final article, we are going to examine a case study where we look at the high-points of a recent lease I completed.

We started with part one where we compared a lease to a month-to-month rental agreement and what happens when your lease expires while the commencement date and rent payments were highlighted in part two.

Part three explained the security deposit and why to pay attention to the property condition and maintenance.

In part four we discussed how to handle repairs and alterations, the landlord entering the premises, subletting and terminating a lease early and in part five the types of forms and leases were illustrated.

Our case study is for a 7,500 square foot industrial building in the Napa Valley used for the production and storage of wine as well as retail sales, tasting, events and an office. I have withheld any identifiable features from our discussion for privacy.

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Understanding the lease - part five

Highlighting where we have been, in part one we compared a lease to a month-to-month rental agreement and what happens when your lease expires.

Part two defined the commencement date and why you should pay your rent on time if not early.

The use of the security deposit, property condition and maintenance was highlighted in part three.

Part four explained how to handle repairs and alterations, the landlord entering the premises, subletting and terminating a lease early.

I promised you we would be discussing the commercial lease, which we will start to do in this article. Fortunately, as I highlighted the major points of a residential lease, this laid the groundwork for the commercial lease because most of the terms are common to both.

The forms used

Just as there are several residential lease agreement forms available the same is true for commercial leases. In my locale, the majority of leases for most of the property types I handle use the 19 page (usually ends up being 31 or more pages) AIR CRE forms. CAR (California Association of Realtors) does offer a six-page commercial lease but is only suitable for basic properties when only a simple lease is needed.

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Understanding the lease - part 4

The lease is an essential document as it gives a tenant the right to use a property from the owner. Knowing the terms in the lease before you sign and during your use will provide you with peace of mind with minimal surprises.

In part one, you learned how a lease is a contract that creates a relationship which gives the tenant a right to use a property.

In part two we discussed the commencement date and the responsibility of paying the rent promptly.

Part three explained the uses of the security deposit and repairs & maintenance issues.

We are going to wrap up this portion of the series as we discuss alterations, entry, subletting and early termination as it pertains to the ten page CAR (California Association of Realtors) “Residential Lease or Month-to-Month Rental Agreement.”

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Understanding the lease - part 2

Unfortunately, some leases can last longer than some marriages. Do not be caught in a lease you do not understand, a property that does not fit your needs, a landlord that does not seem to take care of their property, or a tenant who does not pass your qualifications.

I am currently working with a property owner of an industrial property and a winery tenant who wants to lease it for 15 years. Both parties are concerned with the terms in the lease and are investigating it and the property thoroughly.

In part one of this series of articles

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Understanding the lease - part 1

Getting stuck in a lease with less than favorable terms you do not fully understand can give you years of regret. Both landlords and tenants need to be sure they ask questions and know the specifics before signing.

Unlike purchasing real estate, the relationship created between a buyer and seller is relatively short-term lasting only a few months. A lease can be from one-year up to several decades so knowing what you are signing is important.

A lease is a contract between a landlord and tenant (often termed a lessor and lessee) that allows the tenant rights to the use of a property owned by the landlord for a period.

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Qualifying tenants - part 2

You are familiar with qualifying tenants and administering leases if you own investment real estate.  Whether your rental property is a house or a big box STNL (single-tenant net leased) property occupied by an Office Depot or Whole Foods you have qualified a tenant and executed a lease.

In part 1 of our focus of discussion was for a residential tenant, which is usually an individual or several individuals. Qualifying a tenant of this type is a simple process where you have the applicant complete an application, and as the landlord, you obtain credit, eviction, and criminal reports as well as contact their employer, past landlords and references.

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Creative lease negotiations

The building we found was perfect for my client, Susan, for her new dental office. But, she wasn't too excited with leasing because of the level of tenant improvements needed. We were able to structure a lease that gave Susan some relief for the cost of the improvements, plus the opportunity down the road to purchase.

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