The tenant-build out provisions can be the most important and controversial aspects of an office lease. Yet these terms are often only referred to generally in letters of intent. Rarely will a term sheet go into more detail than the work allowance amount and the commencement date. The lawyers are left to hammer out the details.
If there is any disagreement as to how the build-out provisions are interpreted or applied, then the lawyers get hammered by their clients. After that, some lawyers usually will just get hammered!
We all want to draft leases that are so clear and unambiguous that there is no reason to look outside the four corners of the document to ascertain the parties’ intentions. In a complicated build-out clause, however, with provisions covering approval and objection to plans and specs and drawings, quality of work, resolution of objections, “working order” (good or maybe not so good), and a myriad of other subjective concepts, it is virtually impossible to craft language that cannot be somehow cited to support countervailing positions.
In any event, attorneys rarely have the luxury to perseverate over the tenant build-out clause. Leases need to be completed under tight deadlines. Work needs to start and be completed so that tenants can open for business and landlords can be paid rent. Obligations can be set out and timelines specified, but there are invariably “commercially reasonable”, “good faith”, “tenant and force majeure delay” and other squishy standards that populate a build-out clause in the rush to get the lease executed. The parties will deal any disputes during the build-out process as they arise.
Naturally, if the lease does not expressly deal with a particular problem, who gets blamed? Not the architect, contractor or expeditor, and certainly not the clients. It’s the hard working attorney, that’s who.
Upcoming blogs will include drafting suggestions and model language as to the various build-out scenarios so that lawyers may avoid the future withering admonitions of clients.
By: Eric Rubenstein, Esq Ruskin Moscou Faltischek P.C. firstname.lastname@example.org 516-663-6513
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