AVOID LEASE PROBLEMS

Ready to cash in? Thinking about selling your equity and taking it easy?

Then you should seek professional advisors, experienced real estate brokers and attorneys who understand your needs and are experts in property leasing. Problems with leases are a major reason that restaurants don't sell. Resale value often depends on:
  • Renewal options in a long-term lease; rate increases; ability to negotiate favorable provisions

  • Landlord's lien provisions

  • Merchants' association membership requirements

  • Common Area Maintenace (CAM) clauses; may include insurance, taxes, and maintenance

  • Right to assign or sublease space provisions

  • Automatic cancellation clauses, kick-out clauses, and default provisions
You should carefully consider every aspect of your lease. Many leases are Net-Net-Net (NNN) with a tenant agreeing to share, based on square footage, building insurance costs, taxes, and CAM with other tenants in a shopping center. Taxes and insurance costs are usually easy to verify; CAM costs, however, can cover a multitude of expenses, such as snow removal, parking lot resurfacing, and holiday decorations. Be sure your lease doesn't interfere with your sale.