Katlyn Graham: Hello, I’m Katlyn Graham. I’m here with Jeff Doherty, an attorney at MacLean, Holloway, Doherty, Ardiff, and Morse. Jeff specializes in corporate law. Welcome, Jeff.
Jeff Doherty: Thanks for having me.
Katlyn: Thanks for joining us. We’re discussing lease law, and property lease agreements today. An area of your expertise, Jeff. What are lease agreements?
Jeff: Lease agreements are simply a contract between a property owner, and a tenant for the use and enjoyment of the real estate. It can be a land lease. It can be a lease of a building. It can be a lease of an apartment, if it’s a residential property. It’s a way for the land owner, or the property owner to monetize his investment in the property with a particular tenant.
Katlyn: Why are leases important?
Jeff: As you can imagine, if you own a house ‑‑ to use a very simple example ‑‑ there are all kinds of issues that you have to deal with on a day to day basis. There’s maintenance. There are taxes. There are utilities. There’s water and sewer ‑ those types of expenses.
If you’re living in the property or you’re occupying the property, that’s one thing. But if you own it, and you own it as an investment, then you’re leasing it out to others, you want to make sure as the landlord that all of these issues are addressed so that the value that you realize out of the property is predictable, it’s enforceable, thereby giving you the benefit of the ownership of the property and the economic interest that you’re trying to monetize.
Katlyn: You definitely want the money stream coming in for as long as possible.
Jeff: From the tenant’s perspective, you’re using and occupying a property that you don’t own. What are your responsibilities? It’s important that you understand what those responsibilities are.
It’s also important that you get the benefit of the usage and enjoyment, unmolested by the landlord. You don’t want the landlord showing up at the door once a week saying, “Hey, how are things going.” You want to occupy the property without having the burdens of ownership, and to use the property for, for example, your business.
Katlyn: For a business, does the lease agreement differ a lot from if I were to rent an apartment at lease?
Jeff: It’s very different. The law is very different. With commercial leases, the theme of the law is that you have to be similarly situated in terms of expertise parties, so negotiating the terms of the lease is given great deference.
With a residential property, really the law in Massachusetts favors more often than not the tenant. If you’re a landlord, you want to make sure, for example, in either context, whether it’s a commercial property or a residential property that if the tenant is affecting repairs to the property that they’re using someone with whom the property owner is familiar and approves.
Because, for example, we deal in our office all the time with things like mechanics liens. Now, mechanics liens are liens placed on a parcel of real property by a construction person, a contractor, whomever for work that they’ve done on the property seeking to be paid.
This is an encumbrance. It’s a lien on the property. We want to make sure that when we’re counseling our clients that they’ve gone through the right process, that they’ve made sure that the person that the tenant has hired is approved by the landlord, so that they know if there’s an issue, they can solve it with that particular contractor.
That’s an item just for example that’s critical that the landlord and the tenant understand.
Katlyn: How do leases in Massachusetts favor tenants? What do they often include that favors tenants?
Jeff: For example, there are heightened notice requirements if you want to dispossess the tenant of the property. The procedures, as you might guess, courts don’t often like to throw a family out on the street. They want to make sure that there’s a legitimate reason before they’ll do that.
Katlyn: It sounds like it can get a little tricky. Should a business or even a tenant looking to rent an apartment hire an attorney?
Jeff: They should consider it. Certainly a commercial landlord or a commercial tenant should hire an attorney because leases in the commercial context tend to be very complicated.
There are standard leases that are not very expensive to really negotiate and enter into. You want to make sure you have an attorney like our firm. We do a fair amount of lease representation of commercial property owners.
We’ve got standard forms of leases that we can use, and we can give the benefit of our experience to the client. Again, if you’re pulling a lease off of the Internet and saying, “This is the lease I want to use.” “Well, you certainly get what you pay for there.”
Katlyn: You might be leaving some holes in that lease.
Jeff: Some holes. The lease may not be up to date in terms of case law, making sure that it includes the current status of the law, and its provision have been modified to address those issues however they’ve come out, one way or the other.
It’s important that you have an experienced practitioner working with you, in terms of negotiating and developing the lease.
Katlyn: Thank you so much, Jeff.
[crosstalk]Jeff: Thank you.
Katlyn: …For explaining this. For more information, you can visit the firm’s website at mhdpc.com or call 978‑774‑7123.
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