Unlock Electronic Signature Legitimateness for Commercial Lease Agreement in United States

How to eSign a document: electronic signature legitimateness for Commercial Lease Agreement in United States

yeah this will be the um the final pages of the commercial uh car commercial lease agreement and some uh additional information perfect all right you can take it away Michelle okay thank you everybody for coming I know we're very close to the holidays so it's nice to see you all and uh if you have any questions you can stop and ask or put them in the chat box if you don't have a mic and we'll address them okay so we are starting on page four we left off at page three last time so the estoppel certificates um so the tenant shall execute return a tenancy statement which we call estoppel uh delivered to the tenant by the landlord or landlord's agents within three days after its receipt sometimes if a building is up for sale or anything like that then the new uh lender will require these estoppels so when you uh deliver a stopples if you are um drafting for the landlord please have email documentation on those estoppel giraffes even if you have the lease agreements that the landlord has reviewed them and concurs with what is in the statements the landlord will also sign the estoppel certificate but you want to have track that they were asked to review it because sometimes if leases are old maybe all the paperwork or upper on the rents wasn't included at any rate make sure that the landlord does go ahead and review those they will obtain the tenant's signature and they will also sign it okay we went over 10 and estoppel on a prior training so I won't pull that up I can pull it up at the end just to show you to refresh your memory real quick so if the landlord indeed does transfer the building then the tenant agrees that the transfree of landlords interest shall be substituted as the landlord under this agreement it should not and they'll also transfer the security deposit and it should not affect the lease in place for the tenant okay so that goes along with subordination the agreement shall be subordinate subordinate to all existing liens at landlords option however uh this should not be interrupting the tenant's quiet possession of the premises and the lease that is in place will remain in place okay so tenant representation credit the tenant warrants very important that all the statements in their financial documents and their application are accurate it also authorizes a landlord or their broker to obtain the tenant's credit report at time of application you remember when we looked at the application you make sure that your client or the tenant has signed the bottom of the application because most entities that are running credit reports need that signature to to run the tenant's credit so they're going to want to see that on the application that they have signed that it is okay for them to be running the credit 34 requires that you check some boxes so construction re related accessibility standards um it could be an ADA Bathroom or things of that nature um so landlord States the premise has or has not been inspected by certified access Specialists usually um here in most I'd say 90 percent of the leases it has not and if it has then the premises Hazard has not been determined to meet all applicable construction related accessibility standards there's also a disclosure on this that will roll in next but on number 34 it's usually checked has not inspected by um Cas so just pay attention to block number 34 be speaking to your landlord about that as well and there is a disclosure on it that I'll show you at the end of this so dispute resolution um this is the same as the um almost the same as on the residential contracts the mediation provision applies whether or not arbitration provision is initialed below so if the clients the landlord and the Tenant initial the arbitration they are initialing to agree to have disputes arising out of the matters included in the arbitration of disputes decided by a neutral arbitration so if they initial this it's just like our our you know our residential contracts that we're all used to same thing but just bear in mind that mediation does apply whether it's initialed or not okay question yes so to speak into the Jeffrey has a question he's coming up to speak yeah where where number 33 33. presentation a credit uh question report How about if the prospective tenant is equal it's a corporate entity or you know it's a corporate entity uh like like a church how do you how do you uh obtain the credit report on an entity okay I can answer and then Peter or Reuben can jump in so if the tenant is an entity is your question and how do you obtain the credit report so what we normally do is we have a a business application or corporate application and we also have an individual application so we have the individual and you'll see at the back of the lease there is a space for the guarantor to sign we are running credit on the guarantor who will guarantee this lease not on the corporation we are not on the entity because it could be an LLC we're running on the guarantor of the lease which there is a box at the back of this document where the guarantor could sign so we do not run the entity credit we're running the individual guarantor so you always I think we went over a little bit of this last week but let me back up a little bit when it is an entity you always want to make sure that your your um looking on the California Secretary of State side if they have not provided you information on the The Entity like you can pull their documentation there if you don't know how I'll show you I learned something new every day in this business if it's a LTD um Peter can address this more but I was digging around yesterday like why can't I find this well LTD uh limited if it's a corporation comma LTD limited um they're overseas so you're not going to find their documentation and the Secretary of State site what you do is you ask the tenant for it so that you have it to show to the landlord or you ask their agent uh Peter do you have anything to add or Reuben uh yes yes I uh you're right uh Michelle you really have limited uh information on the uh entity or Corporation or LLC for that matter uh all you have you can do is go to the um security of State website and find out whether they're a viable company whether they are whether they have been suspended or whether they are active and then there you can get the statement information about who's authorized to sign and other than that you cannot get any financial information our secular State aside and it is it is uh not if it's not a public list com company you really can get their financials uh data too much but if it is uh you know listed then you can always go to the the website and get their published financial information but anyhow uh when you are leasing it to a corporation you should always um get a personal guarantee if the pump if the company is not list publicly listed because you go for a small company it's very easy for them to go bankrupt and once they go bankrupt that's something you can do you know because it's limited liability uh but you can always you know if you have a personal care and tour you can go always go after the person we're going to talk for uh go to Lincoln rent or whatever are damages that you know that incur so um yeah you know and also uh we mentioned that about the the um Michelle mentioned about the LTD which is the limited uh uh Company Limited and it's usually uh you know for company in Hong Kong Taiwan and Asia country and uh or or the European country uh but in in us we don't have LTD but nevertheless they should you know if they have an LTD and yeah they are doing business in California uh they should be registered in um in in the secular State and then you know as a some company operating in California so you can ask them if you I want to get more information can I add something to that yeah so they're they're as far as due diligence if you're uh you know trying to find out about a company's um uh uh history or or reference you could also do uh uh searches through the Better Business Bureau and then if they have a Dun and Brad score that's like equivalent to a social security uh FICO scores for for individual and stuff uh furthermore nowadays it's a lot easier for us to find out about companies because of the um the web you know you can easily Google a company and find out if they're legitimate or not um pretty much it's like a resume the the for for everybody you know so if you're trying to do your due diligence and it's not like a big publicly traded company um there's other methods of just uh determining the legitimacy of of the corporation and stuff so just uh food for thought and that's a good very good point Thank you thank you um so now we're going to move along we just uh finished the arbitration clause which most of us uh that have been business a while are pretty familiar with joint and interval individual obligations so if there's one more than one tenant each one is individually and completely responsible for performance of all obligations under this agreement meaning if there was two people that signed the lease and one uh disappeared or something the other one is still responsible to pay all of the rent and any other obligations they have under that lease agreement so um hopefully most partners that do that and sign together know that but that's just um telling them here in number 36 okay so 37 is really important because notices um that people may need to serve like the landlord may need to communicate with the tenant or vice versa so we like these boxes filled out so the notices May may be served by mail facts or Courier at the following address or location or any other location that they subsequently designate so please agents make sure that both of these boxes are adequately filled out with the name the address the ZIP code all of that so that if any landlord or tenant needs to deliver a notice to each other they do have this notice box filled out this should never be left blank we need to have that filled out okay so notice is deemed effective um off of these addresses upon the earliest of the following personal receipt by either party or their agent written acknowledgment of notice or five days after mailing the notice to such location by first class mail or prepaid postage prepaid so that outlines when noticed it took place so please don't leave these blank I've seen it a lot of times where they are blank they are very important boxes okay tenants shall indemnify defend and hold landlord harmless from all claims disputes litigation judgments and attorney fees arising out of tenants use of the premises so if they were doing something in there that the landlord wasn't aware or you know that and should indemnify the landlord it's just a clause that's in here and if we go to other terms and conditions and supplements here's what I talked about last week if you have other things to add let's say you want to add in here like maybe there's some tenant Improvement money or landlord shall deliver unit professionally cleaned or broom swept any other additional terms normally broom swept you're not going to put in there because you're going to make sure that's done before but let's say the landlord was giving some rental rebate you could add that in here like one month free rent and and stipulate what month it is and remember member just because the landlord gives one month free you need to make sure that you add in there the tenant shall pay all utilities or Camp fees if that's applicable okay so one month is base rent base rent free rent it's not including all of the utilities so if you're doing a term like that make sure you just say base rent tenants shall be responsible for all utilities and Camp fees during rental abatement period so you want to add that also if the landlord had agreed to provide a little fund maybe some uh what have I seen outlets need to be updated um for the internet and maybe the landlord's being gracious and they're willing to do it so you could put that in there that landlords shall complete updating Outlets located on the West Wall you know put a picture behind it but you can put terms like that in there okay so this is gives you uh blank lines if you don't have enough room you could always say see attached addendum number one okay here you could write that here if this is way too short for you but you shouldn't have that many extra terms it's usually going to be about rental abatement or little items that the landlord has agreed to do upon delivery of the unit okay like maybe new plugs uh maybe add a light somewhere things of that nature okay so the following supplement is attached this is um an option to buy and I'll briefly show you that at the end I've never checked this um on a lease but at any rate it's there for you and I'll show you the on that attorney fees in if any action preceding arising out of this agreement it's telling you here the prevailing party between landlord and tenant shall be entitled to reasonable attorney fees and costs from the non-profiling party so entire contract in all real estate all prior agreements between landlord and tenant are Incorporated in this agreement we don't have any verbal so this contract constitutes the entire contract so if there was anything said verbally or anything like that you have to put all your terms in this contract this is your contract okay so make sure that all the terms if you have additional ones that aren't covered above are in here or on an addendum okay agency confirmation you're always going to do your agency disclosure as we showed you at the beginning of the lease but you're going to also reconfirm it here the listing agent right here they work for the landlord exclusively or both and the selling agent here they work for the landlord or the tenant or their dual so make sure this is also filled out and it also reminds everybody that we're not parties as real estate brokers to the agreement between the tenant and landlord now here is a nice box that a landlord and tenant acknowledge and agree that Brokers do not con we do not guarantee the condition and we cannot verify any representations made by other or verified zoning Etc so read this box it's a nice uh box that the car attorneys have added for us and at the end here it says landlord and tenant agree that they will seek legal tax insurance and other desired assistance from appropriate professionals we are their real estate agent we do not give legal advice Tax Advisor Insurance advice so the tenant's going to sign the lease here the tenant always signs first um do not have the landlord sign unless you have your cashier's check in hand most landlords wouldn't do that anyway but you always make sure when the landlord is executing that you have that cashier's checked all money in that is due on this lease agreement and once the the landlord has the money in hand they can sign the agreement then you can return a copy do not return a copy without all money in hand via cashier's check so here's what we were talking about the guarantee so very important box um sometimes people it could be an individual it could be an entity maybe the individual doesn't have a strong enough financial background so they're going to bring in a different guarantor but if it's an entity please make sure that there's a guarantor on here um is just what we do but check the box make sure this is signed um I like wet signatures but if it's not possible you know I guess you could get it on a sign but she may and I always try to get what signatures on the documents and we have two signed so that the landlord has two to sign and we return a full set back with what signatures back to the tenant as well so at the end here the landlord agrees to rent the premises on the above terms and condition the landlord will sign it here and it'll show the leasing firm here our address and the listing firm here all of this should be completely filled in do not leave any of this blank make sure you've filled everything out here make sure the other agent gives you all of their information so you can put that in the lease okay come on up to the speaker or I'll repeat it okay we have a question just a number on the denim where senior children signature yes there's only two spaces for the tenant right how about if we have four tenants if you have four tenants would I or three what I've done before I put an X I'm gonna print 10 and a tenant B I'm going to put two names here X have them both sign have them both date and then another tenant down here so you can print two names here just make sure they sign above their name so it's Crystal Clear okay any other questions before we move down to some other forms that I think are important okay any uh comments Reuben or Peter okay so this is what we addressed in the um this is gonna automatically populate to the lease agreement um so the landlord states to the premise have or have not been inspected by CS Casp usually for us it's been have not so you're going to fill this out and you're going to have the tenant and the landlord sign it so if there's any repairs or modification necessary to correct violations of construction related accessibility standards to the premises who's responsible the tenant or the landlord you have some outlined in 1718 and 19 I'll go back to those paragraphs to refresh your memory but you want to make sure that you're filling that out so 17 it's talking about maintenance and maintenance of roof foundation so that's what they're referencing in here but you want to make sure that you complete this form in its entirety as much as possible go over it with the landlord I would be going over it before you're executing a lease just make sure that they have a pre-copy of this so you can be addressing it within them and filling it out properly and then both the tenant and the landlord are going to sign the main things that I've seen where there's accessibilities um problems or not problems but things that could be um corrected prior to a tenant even getting in is on the Lois as I mentioned last week we always put in that the landlord delivers like the retail unit with an ADA Compliant bathroom if there's one in there so that's the main thing that I've seen with accessibility of course there's other things but I'm always on on track with the Ada bathrooms because those can be extensive to do and they could be expensive so the landlord will know if it's ADA Compliant and you can ask in your Loi for that okay so this automatically populates this is a California consumer Privacy Act disclosure notice you know on this because it is required in our system and it's a civil code requirement I always have the tenant and the landlord even if I have the landlord signed during the listing I'll still have them sign here again I'll have a tenant line and a landlord line so that I just have it nice and clean and attached to the lease and everybody signed it okay so as you know the property management agreement advisor Property Management advisory we went over this before but it Bears repeating you put in the address we're not property managers we want everybody to sign it we want the landlord to sign it if you're and we want the tenant to sign it we will be adding a line so landlord's going to sign it tenants going to sign in an agent this is just advising that we don't do Property Management we're the real estate agent not the property manager this is a required document for The Brokerage so please make sure you're printing that out it can be found on our website so I was asked about invoicing last week and how you get paid so it's a little bit different on leases so I gave you I'm giving you a simple example of an invoice of how she may and I do it so this is we do it on letterhead here's our return address we date it put our corporate number here and we put the agent who's ever involved in their Dre number at least two XYZ Corporation lease commission items we put the address here so it's a simple Excel spreadsheet and make sure that you are outlining everything here one month even the prorated days outline that this is all tabulated it's Excel if you have free rent make sure you're expressing it here come down here put all the the amounts in because this is probably going to be a step up because there's going to be raises in the rent so make sure you complete the entire invoice this is going to calculate the total due make sure that you tell them over here where to send the check and it's payable to Coldwell Banker George Realty so if you are cooperating with another agent another brokerage um not a Coldwell Banker George Realty that would make us dual but if there is another brokerage involved another agent uh we cannot pay them out until they provide us with their W-9 so it's very simple you just ask the other agent send them a quick email or give them a quick call and ask them to email us their W-9 and then you turn that in you know to our accountant or excuse me you can give it to Anna and they will put that into the system because we can't pay commission to another brokerage without a W-9 so when you are cooperating you you obtain that W-9 once the check comes in from the landlord the company will deposit it to our bank it's Coldwell Banker George we will clear the check we'll make sure the check is clear and then we will cut the check ing to your instructions how that check is split so maybe this is 50 50. you know so you're going to write a simple note uh to uh turn into the system of how the commission will be split and then you're going to also attach the W9 for accounting okay so there is another form that I printed out from our system I know that the landlords we work with they work off of an invoice this is how their preference is but if your landlord is willing to submit this way the total move-in amount due from the tenant per the leases I don't know ten thousand dollars commissioned for listing broker uh commissioned for selling broker and then the balance due of that check to the landlord so there's three um cashiers checked that would come in totaling this amount so in all the years I I invoice because that's what our landlords prefer so it's landlord preference on that but if the uh if the landlord agrees to that you can have it split into three different cashiers check okay and then the landlord needs to sign this that they concur with that okay so you either have an invoice or you use this form instructions for lease check and that can be found on Coldwell Banker George Realty uh website as well so last week I was asked about the certificate of liability insurance you always want to be moving on that on behalf of your landlord you want to make sure that you're requesting it and making sure that before the tenant turns the key on that door that the certificate of liability insurance has already been turned in this will be an annual um certificate of liability they're going to have to to do this annually that will be the landlord's responsibility to collect it um I this is the guy here Stephen ma who made the certificate of liability you notice I've blanked out all of the insured information but you put that he'll put the tenant name and address here and then he'll check uh commercial general liability and then the limits of the policy here okay so you don't need to be an insurance expert what you need to do is make sure that you obtain the certificate of liability insurance and turn it over to the landlord so they can review it and make sure it's what they expected and then the certificate holder right here the landlord is going to be named as an additional insured so they're going to be here now I asked the insurance agent about this and they said if this um certificate because I said how would they know if there's insurance so it's great to add them here because let's say the tenant didn't renew this policy who's ever in the certificate holder box will also be notified that the policy wasn't renewed so I talked to a State Farm to ask them that question so this is what a certificate of liability insurance looks like uh Peter do you have anything to add on this Reuben no I I'm fine okay yeah it's pretty straightforward okay so I have this typed up types of commercial leases this was a fabulous article written by uh someone February 1 2022. I can't pronounce the name because it's it's quite a lengthy name but if you need a copy of this I like this I keep it in my desk because you know I want to know that I'm understanding what each lease type is so if you need a copy of this I'm happy to share it it's just my cheat sheet that I've typed up so that I understand what they're talking about when they call out certain types of leases you know like if you're representing a tenant and you don't understand what the lease is um here's a little cheat sheet or if you further don't understand it please ask management before you commit your tenant to it so make sure you understand what the lease type is this is my cheat sheet um that I typed up for myself if you guys want a copy I'm happy to share it okay so is there any questions okay so I am going to um turn it over to um oh I'm going to show you the option agreement real fast that was uh referenced at the back end of that lease option to buy agreement I've never used this but they do have a check box for it in case a tenant has an option to buy so I just wanted to show you the form briefly uh here it is an option to buy okay and that can be checked into the agreement if that is the case okay I have a question I I mean I have comment on the option to to buy okay if you're representing to buy a uh be very cautious of uh uh advising him the option to to buy or uh and also if you're representing the um the the seller is is even more important to um uh to advise him uh the the pitfalls of uh the option to buy you know for for first for the landlord um it's it's uh it's not a very good um View for the landlord because uh at any time you want to sell the property you have to ask first of all that the the buyer has option to first first write of a refusal to buy the property and then by the time that you you the your um you know you know you deal with it the uh uh the perspective about buyer you know in terms of the you know you have to get the permission for the tenants and the you know it takes a long time and also is uh you know you have to follow certain steps and by the time that um you you want to ascertain the first right of refusal uh the the the prospective buyer will get uh frustrated and and not want to go through the process so uh I usually don't advise the uh the landlord to give the option to buy for the tenants so you know it's but if you do I mean if the the the buyer really insists that you have to talk to the uh the landlord uh you know what the repercussion says and what the risk that he's taking that's why I have to calm down okay okay thank you thank you so much yeah is there any other questions um because I'm going to stop the recording we're going to go over a couple of things that um has come up during the week that people are curious about um before I stop the recording I want to let you know that this is the last training uh for the year so um I wish you all very happy holidays and it's been my great privilege uh to learn with you and grow with you because by training and teaching I grow a lot I read a lot and I ask Peter a lot of questions as well as Reuben so thank you all it's been a pleasure please hold on we're going to stop the recording any other comments Reuben and Peter excuse me I have a question yes uh Michelle and yeah uh as s I I have at least issued uh one buyers asked me you know uh how much percentage to keep the bag okay well um yes we have a list of questions uh Joseph yours is at the top of our list we're gonna um address that uh just hold tight I have that written down we're going to address your question so we will sign off and please stick around for an open uh question and answer session oh okay yeah okay