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Drafting a More Effective Default Clause

By Adam Leitman Bailey
August 30, 2006

Attorneys are making too much money litigating disputes between commercial landlords and tenants. Even the most frequently used 'standard form' leases permit tenants to stall and strangle property owners. Moreover, these same leases leave tenants without proper recourse when property owners fail to follow written commitments. Instead of blaming the judicial system, a judge, a landlord, or tenant ' to paraphrase Shakespeare ' it is time that we practitioners recognize that the fault is not in our stars but in our leases. Because they are the enforcement provision in a commercial lease, default clauses must be revised and developed to better meet the needs of landlords and tenants under the judicial system.

By taking advantage of equitable judicial relief, tenants have been able to avoid having to follow their lease terms, and poorly drafted provisions have permitted tenants to avoid timely payment of their rent and other monies owed under the lease. However, by drafting lease terms 1) that terminate a lease for the chronic nonpayment of rent, 2) that omit any cure period for lease violations, and 3) that make all monies owed under the lease 'additional rent,' many of these problems may be eliminated.

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