In any big real estate deal, you need to make sure that you are protecting your business interests and that you are putting yourself at minimal risk. This is true in all types of transactions, including build-to-suit lease agreements that can come with some unique challenges of their own. Our Long Island, NY real estate litigation lawyers can help you parse all of the details of a deal and make sure that it’s the right fit for you and your company.
How Does a Build-To-Suit Lease Agreement Work?
In a build-to-suit lease agreement, a developer and a potential tenant agree that a building is going to be built specifically for the tenant’s needs. The property is selected and acquired. The developer then designs and builds something that will suit the tenant’s needs.
What Are Some Reasons to Participate in a Build-To-Suit Lease Agreement?
There are some advantages for both parties entering into a build-to-suit lease agreement. Developers can benefit because:
- They already have a tenant for a property that’s in the works
- Leases tend to be long in build-to-suit arrangements
- Many terms of the lease are negotiated far in advance
The developer gets a stable tenant and a good idea about what kind of money they can make in the arrangement. This is not a one-sided transaction though. Tenants also can benefit from built-to-suit leases though. Tenants get:
- A property that has been custom-designed and built to deliver what they need
- The chance to take advantage of some tax deductions on rent
- Long-term costs could be reduced due to the custom nature of the property
- The tenant can find another property after their lease expires because they are not tied down by ownership
It is just important to establish rules about rent payments, who handles taxes, and whether the tenant or landlord takes responsibility for expenses like structural repairs and insurance.
Do I Need an Attorney?
We recommend that you have an attorney present any time you are making a big real estate deal. An experienced lawyer from our firm can help you go over contracts and ensure that every detail is accounted for. How long is a lease agreement going to last? Is there an option to buy out the property? How is the responsibility for building-related expenses divided up? You want to be positive that your contract accounts for every important facet of the deal so that there is less potential for conflict later.
Contact Our Law Firm Today
If you are entering into any kind of real estate transaction, make sure that you know exactly what you are getting into. Contact David A. Gallo & Associates, LLP and schedule a consultation with our team. We would be happy to tell you more about how our attorneys can help you with important deals like these.
