Landlords and tenants alike understand the importance of a lease agreement in Arizona, which governs the use of a property during a set period of time and establishes a working relationship between parties. This is common knowledge, but what is lesser known is that any party named in a commercial lease is able to request amendments to the agreement.
For commercial properties especially, building upgrades and property expansions can significantly impact the terms of a lease. Any planned changes to the premises itself requires revisiting existing agreements, so landlords and tenants should be familiar with the amendment process. It is also wise to work with an experienced real estate attorney who can help with navigating Arizona commercial lease amendments and protecting your interests.
Commercial Lease Amendments vs Addendums
There are two types of changes most commonly made to commercial lease agreements in Arizona: amendments and addendums. An amendment is a modification or change made to an existing lease agreement. It typically alters specific terms or provisions of the lease, such as rent amount, lease duration or permitted use of the premises. An amendment requires the consent of all parties involved and is usually signed as a separate document to be attached to the original lease.
On the other hand, an Arizona commercial lease addendum is an additional document that supplements the original lease agreement. It introduces new provisions or terms that are not included in the original lease. An addendum can address various aspects, such as additional tenants or legislation that requires additional legal disclosures. Like an amendment, an addendum is also typically signed by all parties involved and becomes part of the lease agreement.
While both a lease amendment and addendum involve modifications to a commercial lease agreement, an amendment changes existing terms, while an addendum introduces new provisions or terms.
When to Amend a Commercial Lease
Over the course of a commercial lease term, one or more parties who signed the agreement may find themselves in different circumstances that make certain provisions within the lease unfavorable. Rather than drafting an entirely new lease agreement, the parties can simply create an amendment to the original document.
The following are common examples of when to amend a commercial lease:
- To change the amount of rent
- To address any changes on the premises, such as expansions or building upgrades
- To extend the length of the lease
- To adjust terms, such as use provisions
As long as all parties agree to the proposed amendments of the lease agreement, any details can be changed.
Tips for Structuring a Lease Amendment Request
When structuring building upgrade requests or other key amendments for existing commercial lease agreements, it’s important to be clear, concise and professional in your communication. Here are some tips to help you structure such requests effectively:
- Start with a polite and professional salutation, addressing the appropriate party or parties involved in the lease agreement.
- Clearly state the purpose of the request. For example, if you are requesting building upgrades, specify the nature of the upgrades and their significance.
- Provide a detailed explanation that explains why the requested amendment or upgrade is necessary. Outline the benefits it will bring, such as improved functionality, energy efficiency, safety or compliance with regulations. Include any relevant data or documentation to support your request.
- Specify the desired terms. This may include the scope of the upgrades, estimated costs, timeframe, responsibility for expenses and any other relevant details. Be as specific as possible to avoid ambiguity.
- Justify the financial implications. If the requested amendments or upgrades will involve additional costs, provide a reason for these expenses. Explain how the upgrades will enhance the value of the property, attract more tenants or improve overall profitability.
- Propose a meeting or discussion to further explain your request and address any questions or concerns. This shows your willingness to collaborate and find mutually beneficial solutions.
- Express willingness to negotiate the terms of the requested amendments. This demonstrates a cooperative approach and can help foster a positive working relationship.
- Conclude your request by showing appreciation for the recipient’s attention to your request.
- Offer your contact information so that the recipient can reach back up with you to follow up on your request.
- Follow up with an email or phone call if you don’t receive a response within a reasonable timeframe to ensure your request has been received and to discuss next steps.
It’s important to keep in mind that all Arizona commercial lease agreements vary — and each has its own set of clauses. This is why you should consult with qualified legal counsel, which can help you navigate the complex process of making significant amendments to commercial lease agreements in Arizona.
Review Your Commercial Lease Amendments with an Experience Real Estate Attorney
Negotiating any proposed adjustments to a commercial lease in Arizona can be a complex and time-consuming process. Remember to assemble a strong team of professionals who can understand your needs, negotiate key terms and protect your interests.
The attorneys at Gottlieb Law are prepared to assist your company with negotiating a favorable commercial lease agreement. Contact us today at 602-899-8188 to schedule an initial consultation or make an appointment on our contact us page.