Part 11

9. Defaults and Remedies: The rights and remedies of the parties in the event of a default by the other are largely governed by the express terms and conditions of the lease. In many states, there is no comprehensive statutory scheme governing such rights and remedies. The parties should assure that the lease document accurately reflects their understanding as to what constitutes a default and what will be their respective rights and obligations following a default. There are many economic considerations triggered by the remedies afforded, and therefore it is imperative to limit the exposure to avoid expenses above and beyond what is reasonable in the marketplace.

 

10. Insurance and indemnity: Risk of loss and damage between landlord, tenant and third parties is managed and allocated by a combination of indemnification clauses and insurance requirements. A full understanding of the requirements imposed upon both parties, to fairly allocate those risks in conformance with each party’s risk management policies, will always help reduce exposure to expensive and unwanted problems. It is advised that the negotiating lawyer always consult with the appropriate risk management professionals to insure compliance with lease requirement in light of such policies.