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In the Spotlight: Lease Agreements
When negotiating a lease for a commercial real property, a tenant may request that the landlord make numerous representations. Accordingly, it seems worthwhile to provide an overview of some of the issues that should be taken into account by landlords, tenants and their counsel in the preparation and negotiation of those provisions. While these concerns may seem self evident to experienced and active real estate professionals and principals who participate in real estate transactions on a regular basis, it has been our experience that many attorneys, who do not practice commercial real estate full time, and their clients are not aware of these issues.
The provision regarding the landlord's representations will typically contain several components all of which, when taken together, can create a balanced and fair provision that provides the tenant with certain protections, while at the same time not opening up the landlord to undue liability. [Note: A discussion of fraudulent representations is outside the scope of this article.]
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