Perhaps the most important factor to consider is the location of the leased premises, which will invariably dictate whether the lease is long term or short term. If the location is favorable for a particular type of business, a business owner may still be hesitant to enter into a long term lease. As an alternative, the tenant can negotiate a renewal option, which would give the tenant the option to renew the lease agreement for a specific term by providing notice to the landlord of the intent to exercise the option prior to the end of the initial lease term.

A renewal option may provide a tenant with leverage upon the renewal that is not otherwise available during the initial negotiation of a lease, particularly if the tenant has proven that it is a viable operation that will be a good long term tenant. Landlords are going to be more willing to make concessions for a good tenant.

The terms of the renewal may be laid out in advance in the initial lease, and the renewal may call for an increase in rental based on the Consumer Price Index, a percentage of the rent, or fair market value of the premises. If the parties use the fair market value, or a percentage thereof, then the method of determining the fair market value should be drafted into the initial lease. This will avoid an unnecessary dispute at the time of renewal. In addition, the timing, who hires the appraiser, and who pays for the appraiser should be specified in the initial lease. It is also advisable to include what factors may be considered in the appraisal. For example, a tenant should seek to exclude its installations and fixtures that are to be removed at the end of the lease term from being considered in the appraisal.

When carefully drafted, a renewal option can provide a tenant with flexibility, rather than putting the tenant in a position where the business is incurring the financial risk of a long term lease during uncertain economic times. Moreover, landlords are typically willing to include a renewal option in a lease, and the renewal may provide the tenant with a method to renegotiate more favorable lease terms.

A renewal option may provide a tenant with leverage upon the renewal that is not otherwise available during the initial negotiation of a lease, particularly if the tenant has proven that it is a viable operation that will be a good long term tenant.  Landlords are going to be more willing to make concessions for a good tenant.   The terms of the renewal may be laid out in advance in the initial lease, and the renewal may call for an increase in rental based on the Consumer Price Index, a percentage of the rent, or fair market value of the premises.   If the parties use the fair market value, or a percentage thereof, then the method of determining the fair market value should be drafted into the initial lease.  This will avoid an unnecessary dispute at the time of renewal.  In addition, the timing, who hires the appraiser, and who pays for the appraiser should be specified in the initial lease.   It is also advisable to include what factors may be considered in the appraisal.  For example, a tenant should seek to exclude its installations and fixtures that are to be removed at the end of the lease term from being considered in the appraisal.

When carefully drafted, a renewal option can provide a tenant with flexibility, rather than putting the tenant in a position where the business is incurring the financial risk of a long term lease during uncertain economic times.  Moreover, landlords are typically willing to include a renewal option in a lease, and the renewal may provide the tenant with a method to renegotiate more favorable lease terms.

When appealing the decision of an administrative officer, an applicant can make a simultaneous application seeking in the alternative variance relief if the board should affirm the officer’s determination.  If the board denies the appeal, then an appeal may be made to Superior Court.  The general rule is that all administrative remedies must be exhausted before seeking relief in Superior Court.  In the context of the decision of an administrative officer, an appellant must first seek relief from the zoning board, before filing an action in Superior Court.  21st Century v. D’Allessandro, 257 N.J.Super. 320 (App. Div. 1992). 
   

Appeals to the zoning board of adjustment from the decision of an administrative officer must be taken within 20 days by filing a notice of appeal with the officer from whom the appeal is taken specifying the grounds of such appeal.  N.J.S. 40:55D-72a.   Failure to adhere to the time for appeal will result in the zoning board not having jurisdiction to consider the appeal.  See Sitowski v. Zoning Bd. Of Adj., 238 N.J. Super. 255 (App. Div. 1990)(the Law Division set aside the board’s consideration of an untimely appeal framed as an interpretation and the Appellate Division affirmed).  All proceedings in furtherance of the matter being appealed are stayed when an appeal of an administrative officer is taken to the zoning board.  N.J.S. 40:55D-75.  However, the officer whose decision is appealed may certify to the board after the notice of appeal is filed with him that a stay would in his opinion cause imminent peril to life and property by reason of the facts stated in the certification, and in such case the proceedings are not stayed.  For example, an appeal by a neighboring property owner of the issuance of a zoning permit would stay the right to build until the zoning board rules on the zoning officer’s decision. 

The time period for validity of Approvals is now further extended by the PEA Amendment until at least December 31, 2012 before the time begins to run on the validity of an Approval.   Subsequent to December 31, 2012, permits and approvals have a phased expiration whereby any unexpired portion of the term of the Approval further extends the Approval, limited to up to six (6) months from December 31, 2012, i.e., no later than June 30, 2013. In addition to the foregoing, a developer may exercise any unexercised extension applicable to such Approval. For example, if a developer were issued a permit on November 30, 2010 that was valid for two (2) years with the right to an additional one (1) year extension, the PEA Amendment would stop the clock on the expiration of this permit that would otherwise expire on November 30, 2012 and extend the expiration of the permit from November 30, 2012 to June 30, 2013. Should the developer be timely granted the one (1) year extension applicable under this scenario, the June 30, 2013 expiration would thereby be extended until June 30, 2014.

The Amendment is applicable to most municipal, county, regional and state development permits and approvals, but sets forth specific exceptions and limitations.  Property owners and developers with permits and approvals that are effective on or after January 1, 2007 should seek legal advice to determine the effect the PEA and the PEA Amendment may have on their development rights.

In order for lease negotiations to produce the right opportunities, a business owner must develop a full understanding of its own purposes in entering into the lease, the landlord’s actual or likely positions on “big picture” issues relating to the proposed deal and, in addition, the nature and extent of the proposed uses and operations within the leased space.  This is a prerequisite to negotiations.  Of course, a business owner should also be prepared to come to the table with an open mind and a willingness to compromise and consider creative alternatives.  In such instance, the business owner may succeed in cultivating a (or improving an already positive) relationship with the building owner, as well as furthering and protecting commercial interests.  For example, a tenant with a new business may be willing to expose itself to greater liability in the event of a default by signing a personal guarantee, for example, in exchange for some up-front assistance from the landlord, such as rent concessions during the first year of the term or contributions toward the cost of fitting out the interior of the premises.  In these financial challenging and legally tumultuous times, business owners should give special consideration to safeguarding your rights in the event of insolvency or bankruptcy and in the event condemnation or destruction of the premises.  Having the ability to assign freely your interests in a lease, especially to a newly formed or reorganized business entity and sublet or otherwise transfer those interests are also of paramount importance.   In any event, by being flexible and creative, the business owner stands to create an agreeable lease arrangement and, by the same token, the financial stability that this creates will also advance the long-term interests of the landlord. This is especially true in multi-tenant environments where the stability of one business owner contributes to the stability of another and creates a commercially attractive neighborhood. 
   

It is undeniable that the economic downturn has had a considerable effect on tenancy rates in Central New Jersey and elsewhere.  If you are a business owner who has managed to survive the recession, and you are looking for leaseable space, you should take advantage of the opportunities available in the current “tenant’s market.”   No matter the size of your business, as a tenant today, you don’t necessarily have to accept a lease as proposed by a landlord or sit on an existing lease that is ripe for renegotiation.  Similarly, landlords can take affirmative steps to hold onto existing tenants and attract new ones by providing incentives and by being flexible, in the negotiating process. 
   

Whatever your interests or purposes may be, business owners should take their leases seriously, especially now, given the real potential for securing favorable new deals and restructuring existing ones.  Business owners who fail to do so or who enter the fray unprepared and without the proper tools risk losing an opportunity and, quite possibly, jeopardizing their business - a lesson that some small businesses, unfortunately, have already learned.  Indeed, given the complexities inherent in preparing and negotiating a commercial lease (many of which have not been detailed here), business owners would be well advised to seek legal counsel before entering into any such agreement.