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Harvey Haber’s Helpful Commercial Leasing Arbitration and Mediation Tips (Dec/Jan 2012)

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Do Not Accept Proof of Insurance By Fax

A Landlord should require that the Tenant send the Landlord the Tenant’s original insurance forms and endorsements, but if the Landlord must accept copies of insurance certificates, the Landlord should absolutely insist that the certificates be certified by the Insurer, and not accept photocopies, as they could be falsified.

Lease Documents

It is imperative that both Landlord and Tenant keep all the lease documentation together (including the Lease, and any addenda, riders, exhibits, amendments and related agreements, as well as any assignment/sublet consents, and any subsequent lease documentation).

Otherwise it could be detrimental (to say the least), if an opinion is asked on the lease and it turns out that an important document (such as an amending agreement that has modified the lease) is missing.

Change of Control

If a Landlord agrees in its Lease that it will not unreasonably withhold its consent to the Tenant assigning, subletting, parting with or sharing possession (collectively, a “transfer”) of the Premises, the Landlord should make sure that it also includes a “change of effective voting control” clause (if the Tenant is, or becomes, a corporation) in the Lease.  

Why? 

Because without a change of control clause, a tenant (who is a corporation) could avoid the transfer provisions in the lease by simply selling the shares of the Tenant corporation.

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