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Rajah Lehal

The Overburden of Additional Rent and Keeping Up With the Monthly Rent

April 01, 2016

Links from this article: Read the article here.

Tenants to a commercial lease should consider drafting a ‘rent catch-up’ clause, in the event that additional rent owed increases by a drastic amount.

The lease of SPoT Concord Place Cafe provided that additional rent was to be invoiced by the landlord in a timely fashion at the end of each year of the lease. Timely invoices allow the company to adjust prices/budget to accommodate any additional rent charges. The landlord failed to do this and invoiced the Cafe for 5 years of additional rent. A settlement was reached, but the cafe was unable to pay the rent in a timely manner after paying the settlement cost. The landlord terminated the lease for breach of the additional rent payment term.

Read the article here.Take away:

  • Before entering into a commercial lease agreement, the tenant should ensure that the possibility of being overburdened with additional rent and monthly rent is minimized by inserting strict language around the amount of additional rent the landlord can charge per calendar year.
Commercial Lease
Additional Rent
Commercial Activities

Written by Rajah. Rajah Lehal is Founder and CEO of Clausehound.com. Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.