Date: November 28, 2023Attorney: Joshua M. Gorsky


  • The majority of commercial tenants will confirm that their landlord permits them to use the leased premises for their desired use.
  • Fewer will consider whether the zoning ordinance for the municipality permits their desired use. Often, similar uses in surrounding properties and information provided by the broker gets relied upon.
  • Commercial tenants are best advised to call (or have counsel call) the municipality directly to discuss their desired use of the leased premises.  

Recapture Right

  • A recapture right is a provision found in certain sections of commercial leases and provides the landlord with the ability to reclaim or recapture the leased premises (or a portion thereof) upon the occurrence of certain events.
  • It appears most often in the Assignment/Subletting section of commercial leases and states that the landlord has a right to terminate the tenant’s lease with respect to any portion of the leased premises that the tenant requests permission to assign or sublease. 
  • Commercial tenants should be aware of this provision and if it exists, exercise caution when requesting permission to assign and/or sublease space, particularly if their lease has below market rent, or if tenant is aware that that the landlord may be looking to redevelop the property.


  • A relocation clause is a provision found in commercial leases that grants the landlord the ability to move a tenant from one leased space to another within the same building or property during the term of the lease.
  • It is often used to accommodate a new tenant with specific square footage requirements or to facilitate renovations or remodeling of the property.
  • Although landlords typically offer to cover the cost of relocations, most businesses will suffer a  loss of revenue and customer base that is rarely addressed.
  • Commercial tenants with complex infrastructures or specific licensing requirements should be very sensitive to a relocation clause in their lease.

CPI Rent Escalations

  • Commercial leases often include language that rent shall increase on an annual basis.
  • Increases are typically structured either on a flat percentage basis (i.e. 3%) or by tracking  the increase over the Consumer Price Index (CPI).
  • CPI is a measure that examines the average change in the costs of goods and services over time and is typically used as an indicator of inflation.
  • If CPI is used as the basis for annual rent increases, tenants are strongly advised to negotiate a cap for annual increases. A failure to do so could result in rapidly increasing rent in times of high inflation (i.e. over 8% in 2022).

Time of the Essence Language

  • Time of the Essence is a legal phrase used in contracts such as commercial leases to emphasize the importance of strict adherence to specified timeframes and deadlines.
  • In commercial leases, it often used in the following contexts
    • Payment of rent on a specific date;
    • Exercising an option to renew or extend the lease
    • Performance of repairs and/or maintenance obligations
  • Commercial tenants should be aware that delays or failures to meet Time of the Essence deadlines (wherever they may appear in the lease) may result in legal consequences.

Mandelbaum Barrett PC Real Estate Partner Joshua Gorsky, Esq. is available to answer any specific questions you may have.