Drafting Commercial Leases in Iowa – The Landlord’s Checklist

Prepared By:

Chet A. Mellema

Bradshaw, Fowler, Proctor & Fairgrave, P.C.

801 Grand Avenue, Suite 3700

Des Moines, Iowa 50309-8004

(515) 246-5822;

June 17, 2011

I.  Introduction

A.  The “Standard Form”

B.  The Landlord’s Perspective (vs. Tenant’s)

II.  The Landlord’s Checklist

A.  Alterations and Build-Out

  1. Activities Outside the Premises
  2. Americans with Disabilities Act (and Similar Laws)
  3. Completion of Alterations
  4. Consent
  5. Landmark Buildings
  6. Modifications to Plans and Specifications
  7. Plans and Specifications
  8. Punchlist Waiver
  9. Restoration
  10. Scope of Work
  11. Supervisory Fee
  12. Tenant Improvement Allowance
  13. Tenant’s Records
  14. Warranties
  15. Temporary Signage

B.  Assignment and Subletting: Consent Requirements

  1. Assignment/Sublet of Other Tenants’ Leases
  2. Change of Control
  3. Continuing Status as Affiliate
  4. Fixture Financing
  5. Future Sublease-Related Transactions
  6. Government Tenants
  7. Prohibit Collateral Assignment of Lease
  8. Restrictions

C.  Assignment and Subletting: Implementation

  1. ADA
  2. Advertisements
  3. Assignor Guaranty
  4. Breach of Anti-Assignment Covenant
  5. Confidentiality
  6. Partial Subleases
  7. Processing Fee
  8. Recapture Rights
  9. Tenant’s Profit
  10. Auditing
  11. Previous Concessions
  12. Collection from Sublessee
  13. Disclosure of Tenant’s Income from Subtenant
  14. Can’t Get Greedy
  15. Transactional Requirements

D.  Bankruptcy

  1. Multiple Leases
  2. Shopping Center Premises

E.  Bills and Notices

  1. Date and Delivery Definitions
  2. Means of Notice
  3. Next Business Day Delivery
  4. Service of Process
  5. Tenant’s Notices
  6. Tenant’s On-Site Contact
  7. Who May Give Notices

F.  Compliance With Laws

  1. ADA (as noted earlier)
  2. Definitions
  3. Legally Required Improvements

G.  Consents

  1. Conditions to Consent (All)
  2. Deemed Consent (Avoid)
  3. Discretionary Consents
  4. Expenses
  5. Lender’s Rights
  6. No Representation
  7. Permitted Use
  8. Reasonableness
  9. Scope of Consent
  10. Survival of Conditions to Consent

H.  Default

  1. All Rent Due at Signing
  2. Cross Defaults
  3. Default Notices
  4. Discount for Timely Payment
  5. Impairment of Business
  6. No Right to Cure Event of Default
  7. Noncurable Defaults

I.  Development-Related Issues

  1. Building Expansion
  2. Building Name and/or Address
  3. Condominium Conversion
  4. Construction Restrictions
  5. Expansion Rights
  6. Proportionate Share
  7. Document Signage
  8. Expand Tax Base
  9. Reconfigure Parking, Building or Common Areas
  10. Relocation Rights

J.  Electricity

  1. Change of Provider
  2. Electrical Service
  3. Post-Termination Electric Charges

K.  End of Term

  1. Abandoned Personalty *
  2. Cables and Conduits
  3. Consequential Damages
  4. Holdover
  5. Landlord’s Property
  6. Obligation to Restore
  7. Security Deposit
  8. Tenant Waiver

L.  Environmental

  1. Copies of Notices
  2. End-of-Term Assessment
  3. High Risk Uses
  4. Interior Air Quality
  5. Landlord Indemnification
  6. Notice of Hazardous Conditions
  7. Required Tank Removal
  8. Tenant Indemnification

M.  Estoppel Certificates

  1. Additional Requirements
  2. Estoppels
  3. Failure to Respond
  4. Reliance

N.  Failure to Deliver Possession

  1. Condition of Premises
  2. Delivery Dispute
  3. Delivery Procedure
  4. No Liability
  5. Rent Abatement
  6. Termination Rights

O.  Fees and Expenses

  1. Attorney’s Fees and Expenses
  2. General Fees and Expenses
  3. Witnesses

P.  Future Documents and Deliveries

  1. Future Events
  2. Reporting
  3. Tenant’s Financial Condition
  4. Termination of Lease Memorandum

Q.  Insurance

  1. Additional Insureds
  2. Coordination with Loan Documents
  3. Evidence of Insurance
  4. Improvements and Betterments
  5. Self-Insurance
  6. Should Landlord Insure?
  7. Tenant Failure to Insure
  8. Tenant’s Rights to Proceeds
  9. Tenant’s Special Use
  10. Waiver of Subrogation

R.  Landlord’s Access to Premises

  1. Keys
  2. Landlord’s Right to Enter
  3. No Eviction
  4. Notice Requirements

S.  Landlord’s Liability

  1. Exculpation
  2. Landlord Default
  3. Liability
  4. Liability for Prior Owner’s Acts
  5. Limitations
  6. Tenant’s General Indemnity

T.  Options

  1. Carveouts from Purchase Rights
  2. Conditions
  3. Coordination of Options
  4. Option Maintenance Fee
  5. Timing

U.  Real Estate Taxes

  1. Allocation of Tax Liability
  2. Further Assurances
  3. Imperiled Abatement
  4. Management Fee
  5. Successful Contest
  6. Tax Contests

V.  Remedies

  1. Abandonment *
  2. Default Rate
  3. Equitable Relief
  4. Inducement Repayments
  5. Interest and Late Charges
  6. Intermediate Remedies
  7. No Mitigation
  8. Nonpayment
  9. Ownership or Succession
  10. Right to Cure
  11. Waiver of Jury Trial

W.  Rent

  1. All Payments Are “Additional Rent”
  2. Finalizing Dates
  3. Free Rent
  4. Payment
  5. Rent Concessions
  6. Rent Not Per Square Foot
  7. Waiver
  8. Miscellaneous Issues

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