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so if you're a commercial property owner regularly analyzing your tenants and your portfolio for possible defaults might be a way to give yourself some advantages first of all if you're observing for defaults you might observe whether or not there's been a change in the company ownership of your tenant if that's the case that might trigger some terms in your lease you also might want to look to see if the operation is different maybe they're involved in a different type of business the change in the nature of business is sometimes covered in the lease agreement is there any alterations of the structure inside the company or the company finances all of these might even create what's called a constructive sublease and you can check with your attorney on those types of arrangements and a constructive sublease might mean that look we leased this property to you under this term and condition with these corporate executives and principals if now there's a different person operating it in a different corporation constructively the the main tenant might have sub leased it to somebody else even if it hasn't formally been done on a lease agreement looking at the company finances to make sure the company is still intact in an ongoing concern might be a way to make sure that your lease is so valid leasehold improvements that have been put on the property with encumbrances sometimes will void the lease because you have an expectation that no encumbrances go to the property if there's UCC filings for that business look to see what both sides of that UCC financing are who is the guarantor and who is the debtor making sure that both of those match or one of those matches your tenant is the way to make sure the property hasn't been constructively subleased making sure that no activity or no alterations have increased your insurance risk because that's usually a factor in your lease agreement is that there's nothing that's done that's going to increase your risk or liability on that business or increase your insurance policy any of those factors might not technically be a default but a way that you can approach your tenant to increase the rental or amount or to adjust the terms and conditions if not ask for additional guarantees ask for may be additional estoppel payments to kind of have a higher security deposit you may also require that they start submitting piell's to you so you can monitor the health of their business as a commercial property owner investigating this either directly or covertly will give you a heads up there's going to be any problems with your tenant and if they are going to be a problem you can get some increase rental payments increased security deposits that will mitigate potential losses if the tenant defaults or goes bankrupt down the road asking for additional security deposit or additional rent payments when the company's already bankrupt isn't going to work asking for 18 or 24 months in advance will give you some mitigation revenue so that when they do go bankrupt you have additional offsets for that company that usually can't be clogged back from a trustee but you want to check with your attorney on that as well