What litigators like to see in commercial leases (from the landlord’s perspective)

4/24/2015 | Commercial Litigation Blog, Kaplin Stewart Blog

But with that said, there are a number of provisions that, from a litigation standpoint, will materially improve the landlord’s position in the event of a default.

First, warrants of attorney to confess judgment for possession, for money, or both.  Requiring prior notice followed by a short waiting period before confessing judgment avoids misunderstandings caused by things like delayed mail without materially weakening the value of such provisions.

Second, a jury trial waiver.  Trying a case to a jury costs about twice as much as trying the same case non-jury. Picking a jury, having the jury instructed on the law, and waiting for the jury verdict can add several days to the length of trial, and the additional paperwork required for a jury trial also takes time to prepare.  No one — not you, not the tenant, and certainly not the judge — wants to try a landlord/tenant case before a jury.  But absent a waiver, the tenant will likely demand it, because doing so can delay the actual trial for several months, or more.

Third, a provision requiring the tenant to pay the landlord’s legal fees.  Without this, delaying the case doesn’t cost the tenant anything more than rent and late charges.  Some leases contain a “two-way” attorneys’ fees provision, which requires the “prevailing party” to pay the losing party’s legal fees. 

This is less desirable than a one-way provision, unless you are willing to assume that the landlord will ALWAYS be the “prevailing party”.  Despite the fact that landlords are always on the side of righteousness and good, they sometimes lose cases.  A one-way provision protects the landlord from having to pay the tenant’s legal fees.

Bill