I am currently working through the lease documentation phase on behalf of a fine dining, continental-style restaurant in one of the most desirable submarkets in Los Angeles.  It is a 10 year lease and the tenant (my client) is justifiably a little anxious working through the details of the lease contract.  Next to a mortgage, a commercial real estate lease might the biggest contractual obligation business people will ever enter into.  Who can blame them? 

 

That anxiety is good when it results in attention to detail and a desire to clearly understand every clause the lease.  For that, my patience is bottomless.  But other times, it bubbles up as interference with forward progress.  Then it’s me that gets anxious.

 

My client and I received the first draft of the lease from the landlord – a big national firm with its own in-house legal department.  In the lease draft, there were a few instances where the language the lawyers used did not match up with the terms we arduously negotiated.  The tenant emailed me back with their comments, understandably concerned.  I confirmed their observations, provided guidance on each one, and sent them back the lease draft with my “redlined” changes.  I instructed them to send my markup to their attorney so he could review the lease, add his own comments, and change mine if he saw fit.

 

The next day, my client emailed me again and asked if I had discussed their concerns and the mistakes in the lease draft with the landlord’s leasing representative.  “No” I said, explaining that these mistakes are not uncommon and that they would be corrected in the back and forth of the lease comments process…and asked if they had sent the lease on to their attorney.  They said that they had put their attorney on standby until they could get a corrected lease draft.  I grimaced.

 

Were they wrong to want the lease to be worded clearly and correctly?  Of course not.  But I urged them to trust me – I have worked through hundreds of lease negotiations.  Asking the landlord to make minor corrections before sending the lease to their attorney was a waste of their own precious time and would be unnecessarily aggravating to an institutional landlord like this one.

 

After some soothing strokes, I got the tenant to see it my way and progress resumed.  I think all professional advisors would agree: sometimes the most important negotiating you do is with your own client.  And it’s always for their own good.