Revisiting Boilerplate or 'Miscellaneous' Lease Provisions

Name/Address of Building

In the standard office building lease, there is typically a provision granting the Landlord the express right, among other things, to rename the Building. The following is an example of a Landlord favorable provision:

Landlord may from time to time change the name, designation, or address of the Building or the Premises without Tenant's consent.

A change in the name of the building, the suite number of the premises or the address of the building will require a tenant to send out notices of such change to its lenders, service providers, customers and clients and require the tenant to modify its letterhead and marketing materials, all of which could add up to substantial costs for the tenant, especially if a Landlord is allowed to make one or more such changes more than once in any given year. The following provision, while still allowing the landlord to control the naming rights of the building, offers some protection to a tenant:

Landlord may from time to time change the name, designation, or address of the Building or the Premises without Tenant's consent on not less than sixty (60) days' prior written notice to Tenant; provided, however, Landlord may not voluntarily change the name, designation and address of the Building more than once in any twelve (12) month period.

By adding a notice provision, a tenant will be afforded sufficient time to prepare change of address notices to effect an easier transmission for its customers and clients and to maintain continuity with its lenders and service providers.

Rules and Regulations

Another provision that is often included in a landlord-favorable lease in order to preserve the landlord's right to exercise control over the building and the common areas thereof is the landlord's right to prescribe rules and regulations concerning conduct and activity at the building. However, too often, this right is broader than is reasonably necessary as is evidenced in the following provision:

Landlord, from time to time, has the right to make, establish and promulgate rules and regulations for the Building, and the occupants and tenants thereof, and Tenant shall observe, keep and comply with and cause its employees and invitees to observe, keep and comply with such rules and regulations.

Note that this provision does not require prior notice to the tenant before such rules are effective, which may cause the tenant to be in default under the Lease. Furthermore, nothing in this provision acknowledges that to the extent any such rule or regulation may be inconsistent or contrary to a provision in the lease, the terms of the lease should control. The following provision addresses these concerns while still allowing the landlord to maintain control over conduct and activity at the building:

Landlord, from time to time, has the right to make, establish and promulgate in good faith reasonable and nondiscriminatory rules and regulations for the safety, care and cleanliness and preservation of good order in the Building and the occupants and tenants thereof, and Tenant shall observe, keep and comply with and cause its employees and invitees to observe, keep and comply with such rules and regulations; provided, however, Landlord shall give Tenant at least thirty (30) days' written notice prior to the effectiveness of such rules and regulations, and further provided that none of the aforesaid rules or regulations may be inconsistent with this Lease or proscribe Tenant's use and occupancy of the Premises or use of the Common Areas in a customary manner for a first class office building.

In addition to requiring that the landlord give the tenant advance notice before the rules and regulations are effective, the above provision requires that the landlord be reasonable in establishing any such rules and regulations. This provision further limits the permissible scope of any rules and regulations that may be established by the landlord only to those rules and regulations regarding matters of safety, care, cleanliness and the preservation of order. Finally, this provision, as revised, requires the landlord to treat all tenants of the building similarly.

Next month's installment will discuss lease provisions pertaining to legal fees and expenses and sale/exchange and assignment by the landlord.

Part One of a Two-Part Series

The May 2005 issue of Commercial Leasing Law & Strategy published an article presenting an overview of certain boilerplate provisions often found in the “Miscellaneous” section at the end of a commercial lease. (“Don't Forget the Boilerplate: Not All Standard Miscellaneous Provi-sions Are Standard,” co-authored by Christopher A. Jones and Scott A. Weinberg.) The authors noted that after spending significant time drafting and redrafting the more “substantive” provisions of a lease, several seemingly less important provisions are frequently unexamined. The authors also noted, however, that the boilerplate provisions in leases are often not uniform, but instead, can vary dramatically, depending on whether the lease is drafted on behalf of a landlord or a tenant, and therefore, such provisions must also be carefully reviewed to ensure that they capture each party's understanding of the lease terms.

This article identifies certain boilerplate provisions most often found in leases drafted by a landlord in order to preserve the landlord's control of its project and the activity being conducted in and around its building. These provisions are often drafted for the sole benefit of the landlord. While a landlord is unlikely simply to delete any of these provisions, this article suggests alternative language and modifications to such provisions to be requested when representing a tenant.

Name/Address of Building

In the standard office building lease, there is typically a provision granting the Landlord the express right, among other things, to rename the Building. The following is an example of a Landlord favorable provision:

Landlord may from time to time change the name, designation, or address of the Building or the Premises without Tenant's consent.

A change in the name of the building, the suite number of the premises or the address of the building will require a tenant to send out notices of such change to its lenders, service providers, customers and clients and require the tenant to modify its letterhead and marketing materials, all of which could add up to substantial costs for the tenant, especially if a Landlord is allowed to make one or more such changes more than once in any given year. The following provision, while still allowing the landlord to control the naming rights of the building, offers some protection to a tenant:

Landlord may from time to time change the name, designation, or address of the Building or the Premises without Tenant's consent on not less than sixty (60) days' prior written notice to Tenant; provided, however, Landlord may not voluntarily change the name, designation and address of the Building more than once in any twelve (12) month period.

By adding a notice provision, a tenant will be afforded sufficient time to prepare change of address notices to effect an easier transmission for its customers and clients and to maintain continuity with its lenders and service providers.

Rules and Regulations

Another provision that is often included in a landlord-favorable lease in order to preserve the landlord's right to exercise control over the building and the common areas thereof is the landlord's right to prescribe rules and regulations concerning conduct and activity at the building. However, too often, this right is broader than is reasonably necessary as is evidenced in the following provision:

Landlord, from time to time, has the right to make, establish and promulgate rules and regulations for the Building, and the occupants and tenants thereof, and Tenant shall observe, keep and comply with and cause its employees and invitees to observe, keep and comply with such rules and regulations.

Note that this provision does not require prior notice to the tenant before such rules are effective, which may cause the tenant to be in default under the Lease. Furthermore, nothing in this provision acknowledges that to the extent any such rule or regulation may be inconsistent or contrary to a provision in the lease, the terms of the lease should control. The following provision addresses these concerns while still allowing the landlord to maintain control over conduct and activity at the building:

Landlord, from time to time, has the right to make, establish and promulgate in good faith reasonable and nondiscriminatory rules and regulations for the safety, care and cleanliness and preservation of good order in the Building and the occupants and tenants thereof, and Tenant shall observe, keep and comply with and cause its employees and invitees to observe, keep and comply with such rules and regulations; provided, however, Landlord shall give Tenant at least thirty (30) days' written notice prior to the effectiveness of such rules and regulations, and further provided that none of the aforesaid rules or regulations may be inconsistent with this Lease or proscribe Tenant's use and occupancy of the Premises or use of the Common Areas in a customary manner for a first class office building.

In addition to requiring that the landlord give the tenant advance notice before the rules and regulations are effective, the above provision requires that the landlord be reasonable in establishing any such rules and regulations. This provision further limits the permissible scope of any rules and regulations that may be established by the landlord only to those rules and regulations regarding matters of safety, care, cleanliness and the preservation of order. Finally, this provision, as revised, requires the landlord to treat all tenants of the building similarly.

Next month's installment will discuss lease provisions pertaining to legal fees and expenses and sale/exchange and assignment by the landlord.