One mention of "compliance with laws" and your eyes glaze over, right? "Time to bring in the lawyers to hash it out," is often heard.
Here are few tips to impress your friends (and hopefully, your clients):
- Landlord's View: Surprise, Landlords generally do not have a problem causing their building to comply with laws (including, dare I say it, ADA), but they don't want to fix everything that is non-compliant. Why would they if no one is enforcing it? Face it, you've done work in your backyard without a permit, right? No harm, no foul.
- Tenant's View: Tenants naturally want to make sure that they can conduct their business in the space and that it's safe to access it.
- Simple Solution:
- Landlord agrees to deliver the Premises to Tenant in compliance with laws to the extent required to allow legal occupancy. Beyond this, it's Tenant's obligation to keep the Premises compliant.
- Landlord agrees to pay for non-compliance issues (ADA) in the Common Area to the extent necessary for Tenant to use the Premises for general office use, and for reasonably safe access to and from the Premises by its employees and customers.
- Tenant agrees to pay for non-compliance issues (ADA) in the Common Area to the extent triggered by Tenant's improvements or a particular use of the Premises other than for general office use.
- Landlord agrees to bear these costs as part of its delivery obligation (and there may be a 12-month warranty tied to it). Thereafter, compliance costs would be included in CAMs.
Next time your clients are arguing over compliance language, consider using these points to align their views. Or better yet, include some of these points in your next LOI. It's not a zero-sum question. Both parties can win if their pain points are adequately addressed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
