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  • InsideTrack
  • February 02, 2022

    Legal Research 101: Crafting Commercial Lease Agreements

    When drafting a commercial lease agreement, entering into a new lease, or challenging provisions of a lease, you need access to authoritative sources. Law librarian Amy Crowder lists some of the best resources for putting together the best commercial lease for your client.

    Amy Crowder

    commercial realtor

    Feb. 2, 2022 – Commercial lease agreements can be complicated.

    Commercial leases cover all sorts of real property, from single offices or retail locations to entire commercial buildings. In most states, there is limited statutory authority on commercial leases. Lease terms are negotiable and may vary greatly depending on the rental property and needs of your client.

    It is important to draft a lease that anticipates potential areas of conflict and clearly defines the rights and obligations of the landlord and tenant. It is essential the terms of the commercial lease meet the needs of your client. A mistake or an oversight in the lease agreement may possibly affect your client for years to come.

    Luckily, there are legal practice sources that can help you draft a commercial lease, starting with these:

    Finding Sources of Forms and Clauses

    Friedman on Leases, published by Practising Law Institute and currently in its sixth edition, is regarded as the leading authority on commercial real estate leasing.

    Amy Crowder Amy Crowder is state law librarian with the Wisconsin State Law Library. She is currently serving as vice president of Law Librarians Association of Wisconsin (LLAW), whose members regularly contribute to InsideTrack.

    This treatise analyzes a full range of lease provisions and a balance of landlord-tenant issues to help in negotiating and drafting a lease agreement. The title is updated semiannually, and contains the most current and relevant developments in commercial leasing. Chapters within this three-volume set provide in-depth discussion and case law. Topics include rent; percentage leases; assignment, subletting and mortgaging by tenant; fee mortgages; damage and destruction of leased property; repairs; landlord’s services and other obligations; condemnation; renewals; purchase options; exclusive use; termination; tenant bankruptcy; options to cancel; alterations and improvements by the tenant; exclusive use; and many other related topics. Friedman on Leases contains numerous sample lease clauses and commercial agreements.

    The Commercial Lease Formbook: Expert Tools for Drafting and Negotiation contains 27 complete commercial leases and related forms covering office, retail, industrial/warehouse, and specialized leases. Each form is accompanied by editorial comments providing the context in which the form can be used, landlord and tenant concerns, and ways to modify the sample forms to fit your client’s specific needs. This publication is the collaborative effort of members of the American Bar Association’s Real Property, Trust and Estate Law Section’s Commercial Leasing Committees.

    Also from the ABA’s Real Property, Trust and Estate Law Section, Commercial Retail Leases and Outlot Purchases: A Practitioners Guide to Forms and Provisions is a practical guide to leasing negotiations. It discusses critical negotiating topics and provides sample clauses to address the pre-opening period, use restrictions, securing lease obligations, priority lien rights, percentage rent, taxes and insurance, common areas, lease transfers, co-tenancy, mixed-use, outlots, and maintenance.

    Published in the late 1990s through early 2000s, ALI-ABA’s Practice Checklist Manual for Drafting Leases II, III: Checklists, Forms, and Drafting Advice is still valuable when drafting commercial leases. It explains the most important drafting issues and when to keep an eye out. Each chapter begins with a checklist on that topic. Highlights include checklists on silent lease issues from the landlord and tenant’s perspective, and the “Top 100 Changes a Tenant Would Like to See in a Landlord’s Standard Lease.”

    The Sublease and Assignment Deskbook: Legal Issues, Forms, and Drafting Techniques for Commercial Lease Transfersbreaks down the most common issues in a lease transfer. This book discusses the basics of commercial subleasing, rights among parties, and landlord consent. This American Bar Association publication contains a large number of forms and clauses that offer different drafting approaches and techniques. Published in 2013, it was written by members of the Assignment and Subleasing Committee of ABA’s Real Property, Trust, and Estate Law Section.

    Sources Available on Lexis and Thomson Reuters

    Wisconsin Legal Forms, available on Westlaw, provides several lease forms and provisions accompanied by drafting notes and a checklist together with a discussion of relevant legal and tax principles. It also includes guidance on compliance with the Americans with Disabilities Act.

    Another Westlaw source is Business Transactions Solutions, which includes a commercial lease agreement, a sublease, a lessor’s work letter, and a certificate confirming lease commencement date. The Wisconsin State Law Library provides access to Westlaw at each of our three libraries.

    Larger, general legal form sets published by Lexis and Thomson Reuters also contain various forms, drafting guides, checklists, and federal tax, text, and annotation references for use in drafting commercial leases. Be sure to search “commercial leases” within the indexes of Warren’s Forms of Agreements, published by Lexis, West’s Legal Forms, and American Jurisprudence Legal Forms. Warren’s is available via the Lexis Digital Library with a State Law Library card. The latter two titles are also available on Westlaw at the Wisconsin State Law Library.

    Where to Find Further Guidance

    The State Bar of Wisconsin’s 2012 InsideTrack article, “Getting the Keys: A Quick Guide to Negotiating a Commercial Lease for Tenants” discusses ten points to consider when negotiating or drafting a commercial lease.

    The Lawyer’s Uncommon Guide to Commercial Leasing, from the ABA’s Real Property, Trust, and Estate Law Section, does not contain forms or sample clauses. However, it does permit the reader to quickly read brief synopses of lease situations and lease provisions common to most leases. The book discusses special issues in industrial/warehouse, office, retail, ground, and government leases, and also subleases and specialty leases.

    When drafting a commercial lease agreement, entering into a new lease, or challenging provisions of a lease, you need access to authoritative sources. It is essential the terms of the commercial lease meet the needs of your client. A mistake or an oversight in the lease agreement may possibly affect your client for years to come.

    More on Real Estate Transactions

    Need more guidance on real estate transactions or commercial contracts? Check out these resources from State Bar of Wisconsin PINNACLE®:

    • Book: Commercial Real Estate Transactions in Wisconsin
      This book takes the commercial real estate transaction from the very beginning through closing. Supplemented for 2019-20, this practice guide​ provides the key information you need to help a client determine the soundness of a potential investment and complete the transaction.

    • Book: Real Estate Transactions System
      This book provides a system for collecting and organizing client information so that real estate dealings can be completed with efficiency. Designed to be used in conjunction with the standard real estate forms currently in use in Wisconsin, this book provides numerous sample clauses for contingencies, warranties and representations, and other provisions.

    • OnDemand CLE Program: 18th Annual Commercial Real Estate Update 2021
      Commercial real estate practitioners have learned to adapt to a changing market and adopt new ways of doing business. Receive the tools and resources you need to advise your clients confidently on a wide range of issues with the 18th Annual Commercial Real Estate Update, packed with practice tips and insights to keep you current and ready for what’s coming next.

    • OnDemand CLE Program: Complex Commercial Contracts: The Legal Principles You Need to Know for Effective Drafting 2021
      The fundamental purpose of a contract is to provide clarity, but that’s easier said than done when trying to help parties achieve intricate objectives. Gain tips for drafting contracts with Complex Commercial Contracts: The Legal Principles You Need to Know for Effective Drafting, which​ deconstructs the process and explains how to make contracts stronger and more enforceable.

    Further Research

    A librarian can direct you to trusted legal practice materials. These and other sources that will help you draft a commercial lease are available at the Wisconsin State Law Library.

    Need more? Reach out and ask your local law librarian for help with your research, or at these libraries:

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