Recognition Agreement Sublease

Within ten (10) days of the Tenant`s request, the Lessor must sign a contract and deliver it to a subtenant of all or part of the unmasked premises confirming that in the event of termination of this Lease for any reason whatsoever, if this Subtenant is required to comply and fulfill all its obligations under this Sublease, the Sublease Agreement and the rights of the Sub-Owners therefrom will not be disturbed by the Lessor, but remain in full force. as long as the subtenant continues to meet and fulfill all of its obligations under the sublease agreement. Provided that the landlord provides such confirmation, the subtenant must agree with the landlord and, upon termination of this lease, pay the landlord an amount equal to the minimum or base rent, the percentage of rent (if any) and the additional rent provided for in the sublease. Upon termination of this lease, the sublease will become a direct lease between the landlord and the subtenant, and the parties will issue and provide any other reasonable documents necessary or desirable to implement the above more fully. Notwithstanding the foregoing, in the case of such a certificate, the Lessor shall not be liable for: (a) any prior acts or omissions of the Renter in connection with such sublease (with the exception of violations of a persistent nature which may be corrected by the Lessor); (b) subject to any compensation for the rent previously collected by the subtenant against the lessee in favour of the subtenant; (c) subject to any advance payment of the rent paid by the subtenant to the lessee, except for the current month; or (d) be liable to the subtenant for any deposit that the subtenant grants to the tenant, unless the tenant gives the deposit to the landlord. The landlord`s obligation not to disturb a subtenant`s tenancy and to enter into a direct lease with a subtenant applies only if the applicable sublease agreement: (m) requires the subtenant to pay a base or minimum rent that is not payable less than a proportionate share of that under this lease (this proportionate share is based on the square footage of the premises subleased by a subtenant). in relation to the total area of the demolished premises); and (n) requires that subtenant to pay a proportionate share of the additional rent for the premises covered by the sublease. LEASE CLAUSE: While these factors are relevant when it comes to whether a landlord should or even should accept an assignment of lease or sublease, they are much more critical in the context of recognition discussions. While most factors apply to whether negotiations take place at the time of the initial lease negotiations or when an actual sublease is on the table, there are significant differences. If the parties look at a particular subtenant and a specific subtenant, each of them can control the outcome. When a landlord is asked to accept recognition of a hypothetical future sublease, they must anticipate what that sublet might look like. While recognition agreements are an important tool for subtenants, a primary landlord may be reluctant to accept one, especially if the sublet is less than the tenant`s or lord`s entire space of the underground land, as the primary landlord may lose some flexibility by relocating the space. This is especially true if the landlord needs to reconfigure the floor plan or provide alternative access to accommodate both the subtenant and each new tenant.

If the primary landlord agrees to a recognition agreement, they must comply with the negotiated subletting conditions. If a tenant or sub-seigneur of the land agrees to the market terms (which is especially possible given the ongoing pandemic), the landlord will stick to those terms. If the primary owner thinks they could lease the subleased space on better terms, they may be less inclined to enter into a recognition agreement. On the other hand, a recognition agreement gives a landlord additional peace of mind that if their tenant defaults, they will continue to have a source of income. As with romance, the parties are more willing to give and take when love is in abundance and marriage is on the horizon than when they are faced with divorce. Although homeowners hate empty space almost as much as nature hates emptiness, they also fear the unknown. Typically, a landlord prefers to reserve the decision to accept a subtenant than their own until they are faced with the loss of the underlying tenant. In this way, the landlord can assess the market and assess the subtenant, as a tenant, when all the facts are available.

This is not reassuring for a potential subtenant, and negotiations at the time of subletting about whether the landlord grants recognition can delay the sublease agreement and terminate it. .

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