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BUSINESS SENSE: Commercial Lease Enforcement & Remedies

The lease enforcement or implementation of the agreement between the landlord and the tenant should be deliberately followed to avoid any conflict and discussion. However, there are instances when the agreement will be defaulted and the remedies or solutions will be taken into consideration. Basically, the purpose of every lease agreement is to ensure a joint benefit for both landlord and tenant.  Wherein the landlord receives his appropriate return on investment for his property and the tenant receives suitable value for his rental payment in terms of services as indicated in conformity with the lease agreement. Unfortunately, there are some cases wherein there occur some changes to the business operations of the tenant, that would probably affect the lease agreement. Changes in the Tenant’s business operations tend to redirect the lease agreement away from its negotiated arrangements.  This would then require or elicit the landlords urgent attention to its remedies and solutions. Landlords need to act fast in order to ensure that these minor changes don’t grow into gross violations of the lease agreement. Landlords should work closely with lawyers to enforce their lease agreements, and, just as important, to ensure that the Commercial Tenancies Act is utilized appropriately.  Contact the lawyers at Levy Zavet PC to ensure your leases are consistently followed through with.

In times when parties fail to convene on the contractual obligations under their lease agreement; we generally find each party unilaterally behaving in a manner that is in their own best interest and in total disregard for the interests of the other party. Usually, the landlord protects his business interest and attains the best solution to move forward with by understanding the legal rights and ramifications that are to his avail.  However, tenants, usually less sophisticated and without legal counsel, tend to act more foolishly in breaching their lease agreement.  This often leaves the landlord with no choice but to retaliate in a manner that ultimately shuts down the tenant’s business operations.  It is equally important that tenants consult with a lawyer before embarking on any activities, or lack thereof, that would default or breach the lease agreement.

There are some situations wherein the contract may be ceased by any party whether temporarily or permanently. For the landlord this would usually entail the tenant’s failure to pay the rent. For the tenant these situations are less apparent but available, and depending on the wording of the lease agreement, a tenant should contact a lawyer.  If you are a tenant and feel that your landlord is not living up to his contractual obligations, contact the lawyers at Levy Zavet PC to find the best solution for your business.

The lease agreement usually contains a section for default and remedies in case there may be some violations by either party.  Every tenant should pay attention to the administrative charges for failure to pay rent, in addition to an interest rate for any overdue payment that is generally included in the rent paragraph rather than in the default section.  Often times the lease agreement is very convoluted, such that the landlord may have inadvertently allowed for waivers to enforce certain terms in the lease.  A tenant should capitalize on any terms that act as instructions on what to do, or what amounts or penalties are payable, in the event of a default.  Making these payments or doing as instructed in the lease could save the tenancy arrangement even though it was preceded by an act of default by the tenant.  For instance, most lease agreements allow for a time frame after a rent/money default by the tenant to pay the landlord and bring the lease back into good standing. Thus, a landlord and tenant should be specific when the cure periods start and end.  A landlord should not attempt to implement certain remedies when a tenant still has time to cure a breach. Consequently, timing could be affected by the deemed notice section that is found in some lease agreements.  Hence, once again, both landlords and tenants should contact the lawyers at Levy Zavet PC in order to ensure legal compliance with your landlord or tenant obligations.

Furthermore, depending on the type of enforcement chosen by the landlord, the remedy sought may affect the ability for the landlord to recover any incurred losses or costs. It would also affect the ability to later choose any alternative remedies. The landlord should be weary in simply exercising his right to seize the business assets or terminate the lease. A prudent landlord would consider the market leasing conditions, and balance the competing interests of both parties.  Often times, if their is a general economic downturn, it would be wise for the landlord to work with the tenant.  Having a tenant that pays something is better than having costly commercial real estate that is difficult to re-lease.  Landlords should carefully consider the path to take in protecting its interest and the exposure of its tenant.  Even though the lease agreement is a legal contract, the ultimate consequences to both the landlord and tenant would affect their separate businesses alike.  The lawyers at Levy Zavet PC are ready to show you the legal way that is in accordance with your business operations and mission.

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