CRE 101 - 65yo CPA Tenant Wants Death/Disability Provision - Doctors Note Provision Negates the Lease - I want a simple death
My issue with this sort of provision is that anyone these days can get a letter from the doctor to get out of something as it causes an undesirable health risk. Especially if someone has an irregular heart beat after 60 years of age. He's been a good tenant for a number of years before my ownership, Id like to keep him there, but it seems like he wants an easy out of the new 48 month renewal. He is also adding an office space which requires adding a door into an existing wall (minor TI).

I want the provision to only include a black and white death clause, and not a doctors letter.

**Landlord -** Upon death of the Tenant in this Lease, either the Landlord or the personal representative of the Tenant may terminate this lease upon 60 days written notice, to be effective on the last calendar day of the month. If full notice is not given, Tenants estate shall be liable for rent to the end of the notice period. 

\*If I absolutely HAVE to include a disability clause, then I'd want that to trigger after the tenant has performed at least 24 months of the 48 month term renewal with a 60d notice and an agreement to charge a prorated amount until it's leased. If we accommodate a disability clause, then it negates the integrity of a lease altogether. This isn't grade school, where you walk into a place with a doctors note and your excused from work.

&amp;#x200B;

What should I do?

&amp;#x200B;

**Tenant**  

Death/disability clause

4. In the event of the death of Tenant (XXX XXXX), or in the event Tenant becomes Disabled (as defined below), Tenant or his estate or representatives shall have the option of terminating this Lease by sending written notice to Landlord. The effective date of such termination shall be the thirtieth (30th) day following delivery of such written termination notice (the “Termination Notice Date”). On or prior to such Termination Notice Date, Tenant shall surrender the Premises to Landlord as required in this Lease (the “Surrender Date”). This Lease shall terminate as of the later of the Termination Notice Date or the Surrender Date (the “Termination Date”). Neither party will have any further rights or obligations arising under this Lease after the Termination Date, but not prior to the Termination Date, except for that obligations that expressly survive termination of the Lease. For purposes of this section, “Disabled” shall mean the inability of the Tenant to practice public accounting because of a physical or mental condition that limits Tenant’s movements, senses or activities for a period of at least one hundred eighty (180) consecutive days. In the event the Landlord disputes whether the Tenant is Disabled or deceased, Tenant or his estate or representatives shall submit a certification to Landlord from Tenant’s medical doctor licensed in Texas of Tenant’s Disabled or Tenant’s death certificate within thirty (30) days of Landlord’s notice, or else this Lease shall not terminate.
[{"id": "iu47vtk", "text": "Morbid. Haven\u2019t seen one of these personally. He\u2019s signing personally? Do they have a Corp?", "replies": [{"id": "iuztog0", "text": "signing personally, no corp", "replies": [], "depth": 2}], "depth": 1}, {"id": "iu4ehx9", "text": "Bargain as you wish, but if he gets his way, your choices are (1) get rid of him now, or (2) get rid of him upon a Drs. note.  What does it gain you to push him out and begin trying to re-let the premises now rather than some unknown date in the future?\n\nOn the other hand, he faces the same choices.  At his age, it seems highly unlikely he'd want to go through the trouble and expense of re-locating for what could be just a few years.  He's more likely choosing between retirement now or retirement later.  Why not let him have that choice?", "replies": [], "depth": 1}, {"id": "iu4ha7p", "text": "Is there a reason you wouldn't do a 12 mo, 24 mo or even MTM extension for \"a good tenant for a number of years\"? I understand the typical reasons why you'd want a long extension, but personally I would just give them a blanket sixty day out with notice, with none of the macabre language. You mentioned the TIs are minor, so I wouldn't sweat amortizing those on early termination.", "replies": [{"id": "iu6khlk", "text": "The 60 day out is a good option. Maybe the best option in this thread", "replies": [], "depth": 2}], "depth": 1}, {"id": "iu4ppi2", "text": "Not worth the effort of dealing with his estate in the event of death. If it becomes contentious, the estate could lock up your space while you are trying to spend time either putting them in default or trying to collect. God forbid he leaves something in there that\u2019s valuable to various family members. \n\nJust do a MTM lease with a 30 day out for both sides, and revisit rents once a year if necessary. If something happens then both parties have the ability to get free and clear after 30 days. Keep an eye out for a long term replacement in the meantime.", "replies": [], "depth": 1}, {"id": "iu513l6", "text": "Why would you worry he's just looking for an out for a cheaper lease? He has to stop being a CPA to trigger the clause AND have that confirmed by a Dr. He's also 65.  I think you are being overly concerned. I mean if you can't trust a CPA who can you trust?", "replies": [{"id": "iu6klic", "text": "Agreed, with what the tenant has proposed you could sue him if he opened up an office somewhere nearby.", "replies": [], "depth": 2}], "depth": 1}, {"id": "iu5mmia", "text": "anyone ever tell you pigs get fat, hogs get slaughtered op?\n\nAlso just negotiate a buyout.  Let him pay you 5k or whatever and give you 60 days of notice.  Then you don't need any of this.", "replies": [{"id": "iu6ka6f", "text": "This is a solid and simple option, accelerated rent clause acts as a lease buyout.", "replies": [{"id": "iuztm8g", "text": "can you elaborate on that?", "replies": [{"id": "iv1b9m8", "text": "I think that I have missused 'accelerated' which has to be all of the rent remaining in the term. Instead I mean something like this \nhttps://www.lawinsider.com/clause/early-termination-clause\n\nEARLY TERMINATION CLAUSE. Tenant may, upon 30 days' written notice to Landlord, terminate this lease provided that the Tenant pays a termination charge equal to 2 months' rent or the maximum allowable by law, whichever is less. Termination will be effective as of the last day of the calendar month following the end of the 30 day notice period. Termination charge will be in addition to all rent due up to the termination day. ________ (Tenant\u2019s Initials) Extenuating circumstances will be considered for a 1 month termination charge.\n\n\nThis gives you compensation for having to remarket the property, and limits the tenants exposure to a few months, instead of the entire term.\n\nThe alternative is the tenant just leaves in the middle of the night without compensating you (either through death, legitimate illness or disability, or maybe just desire to retire), and then you will need to determine if it is worth it to you to find him and sue him, or move simply cut your losses and move on.", "replies": [{"id": "iv3vjyp", "text": "thanks for finding the early termination clause", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "iu6jsdd", "text": "EDIT:\nIf your lease has any assignment provisionsnin it I wouldn't add this language. Just keep it simple and do a 60 day out clause or month to month tenancy.\n\n// End edit\n\n\nCan you provide more detail on the rent and space? I'm going to assume that he can't sell the businesses and has no business partners or key employees etc. You could encourage him to take on a partner and take over the lease and the clients.\n\nAre there any costs associated with this renewal? Why the hell do you even care...\n\nI think that the tenant becomes incapacitated due to health and wants to retire, you should let them wind up the company peacefully. The alternative is they die and their estate gets dragged into your lease and turnover becomes a problem.\n\nAssuming they have some chattel and trade fixtures that you want cleared out it may make sense for you to simply let him out of the lease when he wants out, and for you to have 60 days notice at that time and have vacant possession of the space in shell condition.\n\nUnder your proposal, the alternative is essentially him leaving in the middle of the night and giving you the middle finger upon his 'retirement' OR dying and having estate issues and all his business property that you need to dispose of.\n\nI'll say what others have said. Would you prefer vacant space now with no renewal? If that is your preference then play hardball?", "replies": [{"id": "iu7guac", "text": "The concern is getting a semi fake doctor note to quickly vacate. \n\nPersonally I would allow it and optically it looks better to a lender than other people proposing short term leases or straight 60 day termination with no health clause.", "replies": [], "depth": 2}], "depth": 1}, {"id": "iu6p1t8", "text": "Agree to his provision and then require a 6 month rent penalty in the event of disability or death after month 24 of the term.  You get 30 months minimum rent and your tenant is happy.   \n\nOther option is say OK, I agree--but increase the rent due to the tenant's new flexibility.  See how much it is worth to the tenant.", "replies": [], "depth": 1}]