SNDA Agreements for Commercial Tenants: What Actually Happens If the Lender Forecloses?
From a tenant’s perspective, this raises a practical question: what happens to the lease if the landlord’s lender forecloses? In many commercial leasing transactions, the lease will provide—either expressly or by operation of a future subordination clause—that the...
Financing Contingencies in Commercial PSAs: When a Separate Financing Out Is Worth the Fight
Many commercial real estate purchase and sale agreements provide for a single due diligence period during which the buyer is expected to complete its review of the property and either proceed to closing or terminate the contract and recover its deposit. That diligence...
What Is a Promissory Note in a Commercial Real Estate Transaction?
In most commercial real estate transactions—whether involving acquisition financing, seller financing, or capital contributions within a joint venture—the promissory note is the document that actually evidences the borrower’s repayment obligation. While loan...
How to Terminate a Commercial Lease – A Guide for Tenants
One of the questions we get asked most often is: as a commercial tenant, how can I terminate my lease? The first thing to understand is that, generally speaking, a commercial lease does not give a commercial tenant the right to terminate early. There is usually no...
Commercial Landlord’s Guide to Letters of Credit
In virtually every commercial lease negotiation, landlords look for credit support to backstop a tenant’s obligations. Whether it is unpaid rent, repair obligations, or damages caused by tenant default, landlords want to ensure there is a readily accessible source of...
Caps and Floors on Seller Liability in Commercial Real Estate Purchase Agreements
When negotiating a commercial real estate purchase agreement, one of the most important—and often misunderstood—topics is the allocation of risk between buyer and seller after closing. While the purchase price is the headline number, the contract provisions governing...
Drafting Tip: Addressing Direct Claims in Indemnity Provisions in Commercial Real Estate Contracts
In commercial real estate contracts, indemnity provisions are a foundational risk allocation tool. They are commonly used to shift responsibility for certain claims and losses from one party (the indemnified party) to another (the indemnifying party). At a high level,...
What is a Choice of Law Provision in a Commercial Lease and Why is it Important?
When reviewing a commercial lease, the choice of law provision—also known as a governing law clause—is a common element that deserves attention. This clause identifies which jurisdiction’s laws will apply to the interpretation and enforcement of the lease. For...
Why Are Landlord and Tenant Indemnity Obligations Different in a Commercial Lease?
Indemnity provisions are an important component of commercial lease agreements, defining the extent to which each party is responsible for damages, claims, and liabilities arising from incidents related to the leased property. In essence, an indemnity provision is a...
What is a Security Deposit Burn Down in a Commercial Lease?
In commercial real estate leasing, security deposits serve as a critical risk mitigation tool for landlords. Unlike residential leases, where security deposits are often limited by law, commercial landlords have significant discretion in setting the amount and...