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Posts in Commercial Leasing.
January 5, 2014
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Part one of this article series explains a landlord’s obligations under commercial leases and the remedies available for a commercial tenant should a landlord default. Part two of this article will explain how and when to include offset provisions in a lease.

A commercial tenant’s right to remedy a default by the landlord by performing the required work itself and then offsetting the costs of such work against future rental payments is likely the most immediate and effective remedy a tenant could ever have. However, a tenant needs to closely review the lease agreement and know the local applicable law before ever deciding to take such an aggressive measure. Most leases (and the laws of most states, if the lease is silent) essentially prohibit the right of offset, so the sophisticated and creditworthy tenant will need to negotiate for such a right before the lease is finalized.

In Part I of this blog post, we discussed the varied interests of the landlord and the tenant's lender in the tenant’s personal property located at the premises in the context of a commercial lease.  Part II below will discuss suggested compromise solutions and a typical landlord waiver.