On an Agreement to Lease, when it is a Net Lease + TMI - does the amount of the TMI get included in the Agreement to Lease or only on the Lease (what about escalation, only on Lease?)
Also, the book suggests to include the Lease as a schedule on the Agreement to Lease - does each page need to be marked/identified as a schedule and initialled by both parties.
The TMI and every other significant business term should be included in the Offer.
The Offer will usually say that the Tenant will sign the Landlord’s standard form Lease. So, the Offer (Agreement to Lease) is the only time you really get to negotiate.
You should ask for and review the Landlord’s standard form ahead of time. Then, if there are any changes, they should be specified in the Offer.
Make sure any free rent period is in addition to the rental term. This way, you get paid for the entire rental term. For example, 4 months free rent on a 5 year rental; this lease will then run for 64 months, 4 months free at the beginning, followed by 60 months and you are paid on the 60 months to follow.
Many commercial landlords will have their own standard Offers. You will have to compare that to the OREA FORM, if you are using that as a guide. You need to have something as a base document.
It will be difficult to have a commercial landlord initial each page. I see that it is suggested as a best practice; the problem is that you will not likely have any co-operation from the landlords.
This doesn’t mean that you can overlook compliance. If you changed something in your Offer, make sure that change is reflected in the formal lease.
In addition, it is generally wise to recommend that the client have the Landlord’s form reviewed by their own lawyer.
Brian Madigan LL.B., Broker