Description
Commercial leases generally contain certain rights and provisions common to most agreements. However, practitioners face a different set of challenges and considerations when drafting leases involving nonprofit organizations and should understand what these are so as to mitigate risk and liability for their clients.
Nonprofit commercial leases require certain threshold considerations including the type of lease needed based on the mission of the organization and how it is funded. For instance, an organization may need to be in a particular location to serve a specific community, or the organization's purpose may require certain types of real estate depending on how it will be used (e.g., assisting children, animal welfare, providing food for the hungry). Additionally, the organization may receive only a certain amount of funding for a given time.
Furthermore, while nonprofit commercial leases may contain terms found in typical commercial leases, mission-oriented considerations require careful drafting. Boilerplate language will not suffice. For example, when drafting terms related to permitted uses, counsel should understand if/how local zoning laws allow for the uses intended by the nonprofit and draft accordingly. Or when drafting terms related to alterations to the property, counsel should consider how improvements made by the nonprofit using its own financial resources could possibly create an issue where any improvements are considered to be an inurement or private benefit. Given the budgetary constraints of nonprofits, counsel will want to consider an ADR provision that minimizes costs and time involved in case of any dispute.
Listen as our expert panel guides practitioners through unique considerations and pitfalls involved in drafting commercial leases for nonprofit organizations. The discussion will include threshold considerations, key terms, and best practices for limiting risk for each party to the lease.
Presented By
Ms. Bruton is a real estate attorney representing clients in all aspects of sophisticated commercial real estate finance, acquisition, disposition, development, and leasing projects. She has significant experience in capital formation for real estate investments, including joint ventures, mezzanine financing, commercial loans and securitized financing transactions, EB-5 financing, and preferred equity transactions. Ms. Bruton assists clients in the acquisition, development, and financing of a variety of real estate projects in multiple asset categories, including residential and commercial developments, office buildings, retail and shopping centers, and multifamily housing, and represents entrepreneurial and institutional investors.
Ms. Stavile's practice involves diversified commercial real estate and leasing transactions in both the U.S. and abroad. She handles real property acquisitions, sales, and financings; corporate formations and joint ventures; retail, office, net, and restaurant leases; license and distribution agreements; debt and corporate restructuring; and real estate workouts. Ms. Stavile has negotiated air rights contracts and construction agreements, handled the acquisitions of condominium units, and worked on various residential matters.
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
-
Date + Time
- event
Thursday, March 7, 2024
- schedule
1:00 p.m. ET./10:00 a.m. PT
- Nonprofit organizations as tenants generally: distinguishing features
- Threshold considerations
- Types of leases
- Gross
- Net
- Modified gross
- Mission-specific considerations
- Financing/funding considerations
- Types of leases
- Key terms and unique drafting considerations when a nonprofit is a tenant
- Term of the lease
- Rent amount
- Permitted uses
- Renewal
- Alterations/maintenance/repairs
- Damage/destruction/condemnation
- Assignment and subleasing
- Surrendering and holding over
- Insurance and indemnification
- Utilities
- Funding or licensure
- Default
- ADR
- Other terms
- State/local statutory considerations
- Best practices for negotiation and drafting for all parties
The panel will review these and other important considerations:
- What provisions are unique to different types of leases and how does the fact of being a nonprofit as well as the mission of the nonprofit affect the type of lease to draft?
- What considerations are unique to commercial leases with nonprofits as tenants and why?
- What state/local statutory considerations should be taken into account?
- What are best practices for mitigating risk and liability for each party to the lease?
Related Courses
Defeating Reptilian Tactics in Construction Litigation
Tuesday, December 2, 2025
1:00 p.m. ET./10:00 a.m. PT
Insurance and Indemnity Provisions in Commercial Real Estate Contracts: PSAs, Leases, and Construction Contracts
Thursday, October 30, 2025
1:00 p.m. ET./10:00 a.m. PT