Simplified lease documents aid the need for speed, better tenant

With a lease agreement in plain English, negotiating parties have an easier time understanding the terms of the deal.


From Development Magazine Online published by NAIOP, National Association of Industrial and Office Properties
"Tenants often don't understand it. Brokers and owners have trouble negotiating it. And it requires hours of tweaking and finessing with each new deal.
But standard lease agreements don't have to be that way. A year ago, Spieker Properties cut the size of its standard lease agreement in half and the results have exceeded expectations.
The speed of doing business becomes more rapid with each day. When companies grow, their need for additional real estate space often must be fulfilled immediately. Deals must be executed quickly, with minimal time wasted in the negotiation process.
Most of Spieker's tenants are businesses occupying between 6,000 and 8,000 square feet. While the long-form lease still is a viable and even preferred option for some larger tenants, these smaller customers often do not have the resources to spend on extensive and sometimes exhausting negotiations.
A great deal of time was being spent negotiating terms irrelevant to many of these smaller tenants. In addition, the 16-page long-form lease included legalistic language difficult for tenants to understand.
Each provision was reviewed in terms of whether or not it was an issue that had bogged down negotiations unnecessarily in the past. If its elimination did not present any true risk to either party, the provision was simply removed. The search was aimed especially for provisions that had repeatedly become sticking points with tenants.
The short-form lease has completely changed the tenor of Spieker's relationships with tenants. No longer are they intimidated by a lengthy document written in complex language more suited to legal experts. With a lease agreement in plain English, negotiating parties have an easier time understanding the terms of the deal. They spend less time discussing interpretations of the language and more time pushing negotiations forward.
The legal time previously required to execute a lease reduced by 50-75%.
In some cases, legal costs are eliminated altogether and leases are signed essentially in their original form. For more information see : www.houstonrealtyadavisors.com
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