Commercial Real Estate in Kansas City: 5 Clauses To Watch Out For

Commercial Real Estate in Kansas City: 5 Clauses To Watch Out For

Leases for office spaces for rent in Overland Park, KS, can be long and complicated, and often lessees focus on the wrong terms and miss some of the language that really does affect them. Here are a few of these lease provisions to be on the lookout for as you negotiate for a Kansas office space for rent, as outlined in the article “10 Commonly Overlooked Clauses in Commercial Real Estate Transactions”:

#1 Giving Notice

Make sure you carefully look over and note how notices and official communications should be exchanged with your landlord – can you do it by email, or does it have to be by certified mail? Failure to comply with this particular provision could result in consequences ranging from needing to issue another notice to losing certain rights listed in your lease. Here are a few situations in which you might need to issue notice:

  • Failure to comply with a lease term (i.e. missing a rental payment, not providing insurance,  violation of usage terms, etc.)
  • Exercising an option or right (renewal or extension, renting additional space in the property, relocation, purchasing rights, etc.)
  • Government citation of property code violations
  • Hazardous spills or leaks

Make sure you are well aware of how to officially communicate with your landlords in these situations, or you run the risk of losing lease rights and protections.

#2 The Parties and Signatures

It is so important that the names of the parties are correctly identified on the lease, especially where the signature is concerned. An unnamed or incorrectly named party might not be legally bound to uphold the lease, and where the signature is concerned, if an unauthorized party signs or the information is incorrect, the person who signed could be held personally liable for the lease, rather than the business.

#3 Definition of the Premises

Clearly defining the premises is essential to enforcing your rights and protections if any issues occur with your space. For example, if there is a leaky water pipe, the definition of premises will determine whether it is your responsibility or your landlord’s to fix it. Make sure your lease clearly states the exact square footage of your space, as well as defines the common areas you will use, as this will affect the CAM fees you pay.

#4 Indemnification/Hold Harmless

In this part of the lease, the landlord and tenant go through the potential risks and identify who is responsible for remediation in various situations. Possible situations to identify include:

  • Water damage
  • Fires
  • Natural disasters
  • Cars crashing into the building
  • Fallen trees
  • Street construction that affects the property

Sorting out who is responsible for what costs is a complicated question, and is best addressed with the help of legal guidance. The indemnity clause addresses situations in which one party will be financially responsible for dealing with the other party’s losses. This should specifically address cases of negligence. The hold harmless clause is connected to indemnification, because it stipulates that the party who has to deal with the other’s losses may not sue the party responsible for those losses. Needless to say, this could have enormous financial consequences for your business, so work with a lawyer to make sure you are getting a fair deal.

#5 Resolution of Disputes

It’s not uncommon for disputes to arise between parties in a lease, so be prepared with a step-by-step process for resolving any problems – taking issues to court is extremely expensive, and it is in everyone’s best interests to have a speedy and cost-efficient plan in place. Here are a few steps commonly included in dispute resolution provisions:

  • Negotiations – informal discussion of the issue between the two parties, possibly with legal counsel present.
  • Mediation – an objective third party hears the dispute and makes suggestions leading both parties towards a solution. Professionals mediators can do this for a fee.
  • Arbitration – similar to mediation, but in this case the objective third party is authorized to make a formal binding or non-binding decision at the end of the process. Again, professionals can be hired to do this for a fee.
  • Litigation – a case is filed in a Superior, Federal or Justice court, in which case an individual may represent themselves, but a business would need counsel. This process involves hearings, producing a lot of documents, legal fees, possibly depositions, and overall a serious commitment of time and money. Cases that go to trial might not yield a decision for about two years.

If your lease does not say exactly what steps should be taken, consider proposing just negotiations and mediation. Solving things legally is much more expensive and should be treated as an absolute last resort.

Focusing on only the immediate business-related aspects of your commercial real estate in Kansas City lease could be dangerous to your business in the long run. Seek legal assistance, and make sure that you go over every every aspect of your lease so that there are no surprises down the road.

If your business is interested in office space for lease in Overland Park, KS, give us a call at 913-685-4100 to find out more about our commercial office space for rent in Overland Park, KS.

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