commercial lease default letter template

However, even the most frequently used “standard form” commercial leases permit a defaulting commercial tenant either (1) to procedurally stall a summary proceeding that would otherwise end in a swift eviction, or (2) to avoid a summary proceeding altogether by seeking equitable relief and applying for a so-called “Yellowstone” Injunction1 or to use dozens of other defenses and tactics to keep the tenant in possession, often without paying rent.

For these reasons, after the rent clause, the default clause is the most important clause in any commercial lease.

The main objective of any default clause is to give the commercial landlord the legal means either (1) to cause the tenant to cure the breach in an expeditious manner (2) to swiftly and efficiently obtain a judgment of eviction against a tenant in default of the lease and thus be able to re-let the premises to a new tenant ready and able to pay the rent or (3) to minimize the landlord’s out of pocket losses from the noncomplying tenant’s breach of the lease. Because in many parts of the state, some more than others, commercial tenants are able to use the court system to delay and manipulate a landlord and its property, much time and money can be saved by negotiating a powerful and effective default clause-one that will motivate the tenant to comply with all of the terms and procedures of the lease, including the requirement for timely vacating the premises upon the expiration date of the lease.

A well-drafted default clause should incentivize a tenant to follow the protocols specified in the lease, knowing that an eviction and damages will result from a default. In addition, many default clauses include provisions requiring payments for unpaid rent or other damages, or for violations of non-monetary requirements in the lease, including, but not limited to, required landlord approvals for alterations and subleasing, or for failure to comply with the law and government regulations.

The default clause commonly provides the procedure for obtaining an eviction or the threat of an eviction for a commercial tenant’s violation of the lease. Commercial leases require an effective default clause that allows the landlord to force a tenant to comply with all lease obligations.

Commercial lease default letter template