Potential Liability Issues & Risks
Tenants in retail environments may also run the risk of facing steep charges
when the lease provides for a percentage of gross sales of the business.
Not only does this open you up to additional charges, but this gives the
landlord an opportunity to review your financial books, which invades
the privacy of the tenant and places you in a disadvantage for the next
Another common provision to be wary of is a clause requiring a personal
guarantee, which makes the individual personally liable under the contract.
This can expose you personally to significant liability.
We are familiar with common lease violations and ways to ensure compliance.
There are varying levels of breach under commercial leases, and a commercial
lease may only be broken when the breach frustrates the purpose of the
lease. For instance, when a tenant withholds rent due to some action by
the landlord, many landlords will attempt to evict the tenant. However,
this is generally not a proper remedy under Colorado law, and such action
will actually interfere with the landlord's ability to recover damages.
Jorgensen, Brownell & Pepin, P.C.: Working Hard to Protect Your Interests
Under common law, landlords cannot unreasonably withhold the right to assign
the lease. It is important to consider whether the landlord must pursue
the assignor first before the guarantor, and to decide ahead of time whether
the original tenant or guarantor will remain liable if the assignor renews
the lease. By having our team of experienced real estate attorneys at
your side, we will ensure that you don't fall victim to these common
traps and make sure that your interests are protected.