Lease Negotiations: What Tenants Should Know

Signing a lease can be a massive commitment for a tenant. A lease term can run for a long period of time, and the monetary obligations that a tenant can incur can be very burdensome. It is therefore extremely important for a tenant to really understand its needs prior to signing a lease, and for the tenant to try and negotiate a lease structure that fits its needs and risk tolerance. Although the key deal points are found in a letter of intent, or term sheet, the real negotiations often take place during the drafting of the lease. This article will discuss a few key concepts and provisions that every tenant should keep in mind when negotiating their lease.

Rent

Although it may seem like a "no brainer" it is important to point out the different types of rents that a tenant pays, and how certain rents can escalate year over year. There are two main types of rent: (i) fixed rent and (ii) additional rent.