Kickoffs and Endgames
By: Marks & Associates, P.C.
As with many things, the worst problems plaguing most lessors occur either at the beginning or the end of the lease term.
As to the beginning, it is surprising how many leases contain language regarding the commencement of the term that is inconsistent with the lessor’s practices. Many lessors rely on computer programs to provide pricing and fill-in rent and other important data without first checking to ensure that the language of their form documents comports with these computer runs.For example, if the rent is to be paid on the first day of the month, it is essential that the lease provide for either interim rent or some other means of providing for the discrepancy between the delivery and acceptance of the equipment and the first rent payment date.
Similarly, where the lessee has been quoted a 36-month lease, the document should either make it clear that the interim rent is paid in addition to the 36-month lease payments and that the term extends to the last day of the 36th month or that the term ends during the final month. There are many variations on these themes but the language must be clear…and too often is not.