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Nonprofit Org - $1/yr lease Examples

Discussion in 'Commercial Landlord & Tenant Issues' started by mrfnord, Nov 25, 2009.

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  1. mrfnord

    mrfnord Law Topic Starter New Member

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    I work with a small 501c3 nonprofit that just got an offer from a business to use part of their lot. We've come to agreement on terms and are ready to sign a lease but can't locate a good example 'donated' lease. Is there a good source for a $1/yr lease available?

    More details:
    We're a community bike shop, and the space will be used as a fenced work yard where we hold work days and events. We will be building/getting a storage shed, and eventually a shop building.

    The agreement is for about 5000 sq ft of paved lot, with permission to build any fence, building or temporary structure we need, as long as we get permits and fund the improvements. The owner has a night club and some office space on the same lot. Basically we would have rights to all land west of the building.

    The owner has said that we could have the lease as long as he owns the land, and he has no intention to sell to anyone short of eminent domain (the city had considered building a transit center on the site, but has tentatively changed plans). We were thinking something like a 5 year lease that automatically renews, or something like that. Don't know enough about commercial leases to know what we should do though.

    Is there a requirement to have a cancellation clause? Would an extreme cancellation clause hold up in case of death, sale, or eminent domain? If we had a 180 day or 1 year lease cancellation notice period, for example, would that hold up in case of probate or if the city takes the property?

    Also, the owner has offered use of an office attached to a building on the site for a period of time, maybe 6 months or a year, while we get moved in and our building built. Should that be on this lease or a separate agreement?

    We would have full responsibility for permitting and improvements, and if we do eventually leave the property we want to be able to take any shed or improvements with us, as is feasible. Should that be spelled out in the lease? Examples: storage shed, fence, bike racks.

    Is the $1/yr amount required? Also, is there any tax benefit for the owner? This is not a lease for an entire lot, but for a section of one. Will our building increase his property value and taxes?

    The owner is very friendly to us and we don't want to take advantage, and hopefully will be leaving on good terms if we ever do, but we do want to be protected in any eventuality.
     
  2. mrfnord

    mrfnord Law Topic Starter New Member

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    Any ideas? Is there a better place to ask?
     

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