Tax Treatment of Testamentary Trusts
A lease agreement for a business premise is one of the more complicated documents a business owner will encounter. Many issues are covered it a lease agreement some of which are often overlooked during the negotiation process. Overlooking minor issues during lease negotiations can lead to friction between the Landlord and the Tenant over the course of the relationship.
As an example, I recently assisted a client where a lease made no provision for parking for the customers or the employees of the tenants. There was a large parking lot in front of the building which was shared by a number of tenants. Everyone was getting along well until a business that had a very high number of customers moved into the building. Soon, many of the old tenants of the building started getting complaints from their customers that they could not find anywhere to park. They complained to the landlord who then gave notice to the new tenant that their parking areas were going to be restricted, which the landlord was allowed to do under the lease. This did not sit well with the new tenant who started getting complaints from its customers that they couldn’t find a place that they were allowed to park. The tenant threatened to move out, however they would have been in breach of their lease and could be liable to the landlord for damages.
All of this could have been avoided if the new tenant had determined its parking needs ahead of time and required that parking entitlements be set out in the lease. If the landlord could not commit to providing the required amount of space, then the tenant would have had the opportunity to find another location more appropriate to its needs.
image courtesy of Alex92287