By Harvey Haber
Rented v. Rentable
Most commercial leases provide for the tenant to pay a proportionate share of the landlord’s operating costs in the shopping centre, but what if that proportionate share is based on a fraction, the numerator of which is the rentable area of the premises and the denominator is the “rented” area in the shopping centre. If the shopping centre comprises a number of stores but only one is rented, then the tenant under this fraction would pay 100% of the landlord’s operating costs. The creative solution for the tenant is to change the word “rented” to “rentable”.
Mediate First
In the event of a dispute, mediate first. If that doesn’t work, arbitrate. And if that doesn’t work, then litigate.
Why?
Mediation is quick, economical and the parties decide the issue. Arbitration is also fairly quick, cheaper than litigation, but it is a third party, namely, the arbitrator, who determines the issue. Litigation is the most expensive, the most time-consuming, and the issue is decided by a third party, namely, the judge.
Distress
A landlord should be aware that, unless the lease provides for notice, the landlord has the right in the event of a default by the tenant for the payment of rent, to distrain (i.e. seize) the tenant’s goods, chattels and inventory for the outstanding rent, without notice to the tenant.
Harvey Haber, Q.C., J.D., LSM, DSA, C. MED., C. ARB., B.A. – He is senior partner at Goldman Sloan Nash & Haber LLP in Toronto. He specializes in Retail, Office & Industrial Leasing, Mediation and Arbitration and can be reached at haber@gsnh.com or by phone 416-597-3392.
Tags: Lease Agreements, Lease Distress, Leaseing Space, Rentable Area
