Protect Your Building’s Occupancy

Owners, managers, and brokers of new office buildings are usually anxious to fill their space, and to do so, they may not be above trying to charm your tenants away, even if your leases still have some time to run. Some new-building owners may offer to find sub lessees to sublet their prospects’ space in old buildings, and others may even go so far as to offer to help tenants pay their rents for the duration of their leases.
Even if the demand for competing space in your area is high and you don’t have trouble filling your building, tenants who don’t renew their leases and tenants who leave the building before the expiration of their leases can cause serious problems. This article discusses an important provision that you should include in your lease to ensure that your occupancy level remains high.
Full Term Occupancy
Each of your leases should contain a provision making physical occupancy of the demised premises by a tenant for the full term of the lease a condition of the agreement. Under such a provision, a tenant who moves out of the premises without your permission before the lease expires breaches his contract (and is liable for stipulated money damages), even if the rent for the full term of the lease has been paid. To make your position absolutely clear, the lease should provide that continued occupancy of the demised premises and the regular conduct of the lessee’s business therein are of utmost importance to the lessor in the renewal of the other leases in the building, in the renting of space, and in the maintenance of the character and quality of the tenants.
The lease should provide that if any of its terms or conditions are violated, all future rents will become due and payable immediately. In addition, the lease should expressly give the lessor the right of injunction to preserve the lessee’s occupancy and use.
Protect Yourself
Although some tenants will object to a full-term-occupancy provision, most lessees will go along with it. One of the practical advantages of this type of provision is that by merely calling it to the tenant’s attention you may deter the tenant from responding to the temptations provided by your competitors.