"As a commercial real estate developer and attorney, I have negotiated well over 500 shopping center leases. Stu's understanding of the business and legal aspects of shopping center transactions enabled his client to ask the right questions, to obtain the items the client needed to run a profitable business and to negotiate a lease fair to both parties -- the hallmarks of a successful transaction."
OVER 35 YEARS OF HELPING CLIENTS TO:
YOU ARE LEASING THE SPACE NOT BUYING THE PROPERTY, SO WHY CHECK ITS TITLE?
If you are considering leasing space it is a good idea to check the title to the underlying property. Besides assuring yourself that the landlord actually owns the property, you may discover an encumbrance which is inconsistent with your business. For example, I once found a recorded restriction on outdoor retail sales in a commercial shopping center when my client wanted to offer outside dining. Even the landlord was surprised. We made removal of the restriction a condition of the lease.
Other title issues to look for are recorded liens on the property which will tell you something about what sort of a business person your landlord is; easements that might impinge on your space, such as the right to run utility lines through, over or under it; and special property tax assessments that you might be asked to pay part of.
So how do you check the title? Obtain a current title report or preliminary title insurance commitment on the premises and the building in which it is located. Try to get the landlord to supply the report but if that is not possible or the landlord's most recent report is a bit stale, then get your own. Ask a local title insurance company for a "preliminary leasehold title insurance commitment." Most title companies are happy to provide the report, though if you do not plan to purchase the insurance ask about the "cancellation fee." It is usually small. Some title companies will only provide the information in the form of a "limited liability guarantee" if they learn you will not be buying the insurance; Land America Commercial Services, for example, does this and currently charges about $250 plus sales tax. When you are risking thousands of dollars on a new location this can be a very good investment.
"For Professional Help With Your Lease"
With over 35 years of experience Stu Heller helps his clients make smarter business and leasing deals. His website is at www.theleasinglawyer.com and his office is located at 11400 SE 8th Street, Suite 260, Bellevue, Washington 98004. He can be reached at 206-623-0579, fax 206-682-7972, firstname.lastname@example.org and email@example.com. Contact him for a free initial consultation. Be sure to consult your lawyer before applying any of the above to a particular situation.