Tuesday, December 1, 2009

Leasing - clarity is key for Real Estate Investors (and everyone else on the planet)

The standard definition of a real estate leasing is fairly cut-and-dried: A lease is a contract. The contract gives the lessee (tenant) the right to possession and use of an asset (house, business center, etc.) for a specified period. In return for the possession and use, replaced by the lessor (landlord) payments during this time.

Ah, but the devil is in the details of those leases! Often, if you do not pay attention to the language, can reach an agreementanything but cut-and-cry!

A clearly written lease agreement benefits both parties. If you are the owner, you will receive a fair income from the property leased by you. If you are the lessee, so you get the use of the leased asset at a fair.

On the other hand, is a poorly written lease is a recipe for a variety of personal financial difficulties and headaches. For example, if you could the landlord, you end up with a property that produces a low income and / or assessment. If you are the lessee,You might end up paying rent, the excessive in relation to prevailing market conditions.

So, seen from the perspective of both parties from, it is worthwhile to understand fully leases before one can never be signed. Here are a few rules to help you out:

Rule number 1: Always on the lease in writing! I repeat, get it in writing! Never, never, never rely on an oral lease! Such leases can be enforced, but they are much harder to prove, because nothing is written down, and no one has a physical basis for theJudge the validity of the agreement. Good business sense dictates that leases and contracts are written in detail.

Rule No. 2: The language of the lease should be as clear as possible. If someone offers you a lease with terms that imprecise or confused, should prick up their ears at possible financial risk. Insist that the language rewritten, you will be absolutely clear what the rights and obligations of each party.

Rule No. 3: The lease should specificallydefine the rights and obligations of landlords and tenants. In any case, avoid generic or "boiler plate" lease. In addition, a generic form can not be with the state and local laws and consistent reasons for the breach of the agreement. A lease should always be tailored to a particular object, and your specific needs.

Rule No. 4: The lease language can be easily interpreted and enforced by a third party (courts, etc.). If you care to go to court to take leasesInjuries, you want to have the court no difficulty in understanding the conditions of the contract. Otherwise, it can not go in your favor.

Rule No. 5: The lease should be consequences, for violating the conditions (standard, etc.). It should be clear penalties for breaches of lease (eg, late payments, back checks, etc.). If such sanctions are not clear, then you can the devil of a time when the gathering, which by you (if you are the owner).

Rule No. 6: The lease provides for a mandatoryKind of dispute resolution. In order to solve potential lease issues, you want to be sure, have a dispute mechanism (attorney, law firm, etc.), in the lease language. In this way, both parties clearly understand how they can address all disputes.

Rule No. 7: Make sure that the full rent. If someone offers you a summary of a lease or just the first one or two pages, you should of receiving the full rent. Without the full rent, you could sign up for the roughJourney rather than a smooth ride.

Rule No. 8: Read every word of the lease! You can also concepts that are found unacceptable, and you may want some of the language change or add supplements. Of course, terms that are often the subject of negotiations between landlords and tenants.

Rule No. 9: Always have your legal counsel to review the lease before signing it. Unless you have extensive legal experience itself, by a lawyer or other professional review of the lease terms and they explainThem.

Key Point: Understand fully every aspect of a lease signed before you!

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