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Parties to an agreement should look out for additional expenses being added upon renewal of an agreement.

McDonald’s (Times Square, NYC) wished to renew its lease for an additional 10 years but could not come to a fair solution with its landlord. The problem? Wharton Properties was asking McDonald’s to pay extra for their sign on the front of their store in an amount “equivalent to the revenue the landlord could receive if it were permitted to install and sublet a large LED billboard on the exterior of its building”.

Read the article here.

Take away:

  • Be aware when negotiating the renewal of a commercial lease that the landlord may push for additional charges eg. for using your own sign (signage).

 

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