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Commercial Lease Drafting for Nonprofit Organizations: Unique Tenant and Landlord Considerations; Pitfalls to Avoid

A live 90-minute premium CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
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Thursday, March 7, 2024 (in 8 days)

1:00pm-2:30pm EST, 10:00am-11:30am PST

(Alert: Event date has changed from 1/25/2024!)

or call 1-800-926-7926

This CLE webinar will provide practical guidance for counsel representing landlords and tenants on key considerations and issues specific to negotiating and drafting commercial leases for nonprofit organizations. The panel will discuss threshold considerations, contract provisions with unique considerations when nonprofits are tenants, and best practices for mitigating risk and liability for all parties to the lease.

Description

Commercial leases generally contain certain rights and provisions common to most agreements. However, practitioners face a different set of challenges and considerations when drafting leases involving nonprofit organizations and should understand what these are so as to mitigate risk and liability for their clients.

Nonprofit commercial leases require certain threshold considerations including the type of lease needed based on the mission of the organization and how it is funded. For instance, an organization may need to be in a particular location to serve a specific community, or the organization's purpose may require certain types of real estate depending on how it will be used (e.g., assisting children, animal welfare, providing food for the hungry). Additionally, the organization may receive only a certain amount of funding for a given time.

Furthermore, while nonprofit commercial leases may contain terms found in typical commercial leases, mission-oriented considerations require careful drafting. Boilerplate language will not suffice. For example, when drafting terms related to permitted uses, counsel should understand if/how local zoning laws allow for the uses intended by the nonprofit and draft accordingly. Or when drafting terms related to alterations to the property, counsel should consider how improvements made by the nonprofit using its own financial resources could possibly create an issue where any improvements are considered to be an inurement or private benefit. Given the budgetary constraints of nonprofits, counsel will want to consider an ADR provision that minimizes costs and time involved in case of any dispute.

Listen as our expert panel guides practitioners through unique considerations and pitfalls involved in drafting commercial leases for nonprofit organizations. The discussion will include threshold considerations, key terms, and best practices for limiting risk for each party to the lease.

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Outline

  1. Nonprofit organizations as tenants generally: distinguishing features
  2. Threshold considerations
    1. Types of leases
      1. Gross
      2. Net
      3. Modified gross
    2. Mission-specific considerations
    3. Financing/funding considerations
  3. Key terms and unique drafting considerations when a nonprofit is a tenant
    1. Term of the lease
    2. Rent amount
    3. Permitted uses
    4. Renewal
    5. Alterations/maintenance/repairs
    6. Damage/destruction/condemnation
    7. Assignment and subleasing
    8. Surrendering and holding over
    9. Insurance and indemnification
    10. Utilities
    11. Funding or licensure
    12. Default
    13. ADR
    14. Other terms
  4. State/local statutory considerations
  5. Best practices for negotiation and drafting for all parties

Benefits

The panel will review these and other important considerations:

  • What provisions are unique to different types of leases and how does the fact of being a nonprofit as well as the mission of the nonprofit affect the type of lease to draft?
  • What considerations are unique to commercial leases with nonprofits as tenants and why?
  • What state/local statutory considerations should be taken into account?
  • What are best practices for mitigating risk and liability for each party to the lease?

Faculty

Bruton, Jennifer
Jennifer Bruton

Partner
Venable

Ms. Bruton is a real estate attorney representing clients in all aspects of sophisticated commercial real estate...  |  Read More

Stavile, Patrice
Patrice D. Stavile

Counsel
Venable

Ms. Stavile's practice involves diversified commercial real estate and leasing transactions in both the U.S. and...  |  Read More

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