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Four Clauses of Interest for the Tenant, Guarantees – Commercial Lease
Me Gauthier presents the first clause concerning the surface area of the leased premises. This clause has a significant impact on the amounts payable under the commercial lease. When dealing with commercial leases, it is important to first calculate the leasable area of the premises rather than the actual usable area in order to determine the rental cost. Shopping centers are a good example. In addition, the speaker explains the BOMA measurement method, which is generally used for office leases. This widely used method includes both the leasable space and the common areas of the premises (e.g., a conference room). Usually, the formula recommends calculating 12% to 15% of the actual area in order to determine the leasable area. In some buildings, the calculation may reach up to 20%. The landlord will then have to cover the appraisal fees carried out by an independent expert.
The second clause concerns operating expenses and property taxes.
Third, he specifies the use of the leased premises and continuous operation, meaning the clarity regarding how the leased space is to be used under the lease.
The final clause, sometimes overlooked, concerns the tenant’s responsibility for restoring the leased premises at the expiration of the commercial lease.
Me Gauthier also discusses the usual guarantees in a commercial lease, namely movable hypothecs, security deposits, suretyship, and bank letters of credit. He concludes with the impact of the Bankruptcy and Insolvency Act on these guarantees.
In summary, at the end of this conference, you will have a better understanding of the four main clauses of interest to a commercial lease tenant, while also gaining insight into the usual guarantees.
$99.00
• Introduction
• Surface Area of the Leased Premises
• Operating Expenses and Property Taxes
• Use of the Leased Premises and Continuous Operation
• Restoration of the Leased Premises Upon Expiration
- Instructor(s)
- Mrs René Gauthier
- length
- 75 minutes
- Producer(s)
- Miiro
Me Gauthier presents the first clause concerning the surface area of the leased premises. This clause has a significant impact on the amounts payable under the commercial lease. When dealing with commercial leases, it is important to first calculate the leasable area of the premises rather than the actual usable area in order to determine the rental cost. Shopping centers are a good example. In addition, the speaker explains the BOMA measurement method, which is generally used for office leases. This widely used method includes both the leasable space and the common areas of the premises (e.g., a conference room). Usually, the formula recommends calculating 12% to 15% of the actual area in order to determine the leasable area. In some buildings, the calculation may reach up to 20%. The landlord will then have to cover the appraisal fees carried out by an independent expert.
The second clause concerns operating expenses and property taxes.
Third, he specifies the use of the leased premises and continuous operation, meaning the clarity regarding how the leased space is to be used under the lease.
The final clause, sometimes overlooked, concerns the tenant’s responsibility for restoring the leased premises at the expiration of the commercial lease.
Me Gauthier also discusses the usual guarantees in a commercial lease, namely movable hypothecs, security deposits, suretyship, and bank letters of credit. He concludes with the impact of the Bankruptcy and Insolvency Act on these guarantees.
In summary, at the end of this conference, you will have a better understanding of the four main clauses of interest to a commercial lease tenant, while also gaining insight into the usual guarantees.