Lease Review Services

Introduction

A real estate lease might seem like a standard, one-size-fits-all document, but depending on the location and type of property, and even the current economic climate, the conditions of a lease can spell unexpected costs for those signing on the dotted line. Here is a taste of some of the items that we look out for during the process of reviewing the terms and conditions of leases for our customers.

As part of our lease review process, we not only ensure that due diligence clauses are accurate and allow buyers to confirm the details of a property, but we also ensure that terms and conditions are in line with the terms of similar leases in each area. We confirm that payments match or come close to the prevailing market rates, expiration periods are similar to those of nearby leases, and that added costs like utility and maintenance fees are fair.

Right of First Refusal (ROFR) and Right of First Offer (ROFO)

ROFR and ROFO clauses (the two are similar but with small distinctions) create important protections for those participating in real estate transactions. An ROFR clause is “triggered” once the property owner receives an offer from a third party and allows the holder of the ROFR the option to purchase or lease the property on similar terms before the third party is allowed access. ROFO clauses operate similarly in that they allow the holder to make the first offer, usually on terms that are laid out in the clause itself. A thorough lease review process can protect buyers by ensuring that “trigger events” are clearly understood by both parties and that ROFR and ROFO offers, which are typically timebound, are submitted as required by the contracts.

Our customers often raise questions about lease extensions and renewals, and for that reason the final step in our lease review process is ensuring that renewal terms are not designed for the benefit of just one party in a real estate transaction. A lease, like any real estate contract, is a binding agreement that can cause significant gains or losses over the period of its execution. To have a contract reviewed by an experienced set of eyes is a priceless thing, and that is exactly what we offer as part of our lease review service.