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Commercial tenants: Tips about 'going dark'

Leasing commercial space is often a major expense for any business. Between the rent, the cost of maintenance and utilities, and the need to staff the business, there is typically a lot at stake when a business opens its doors.

If you operate a retail store, salon, restaurant or any other type of business that relies extensively on location and foot traffic, you would be wise to understand what a "go dark" clause is in a commercial lease agreement and how it could help you save money.

What is a go dark clause?

Tenants who have the right to go dark have a clause in their lease agreement that allows them to discontinue operations, even while they are still under a lease. As long as the tenant continues to pay rent, the lease can remain place.

Other clauses that you might see

If you have a 'go dark' clause in your lease, then the landlord may want to include a clause that if you go dark, he or she can take the space back. This is a recapture clause, and it allows a landlord to minimize situations where their space is leased out but unused. ADR

Why these clauses are valuable

From the perspective of a tenant, go dark clauses can provide considerable flexibility in the operations of the business. If a particular location is suffering, the owner can go dark and keep expenses to a bare minimum by paying just rent.

Because this can negatively impact other businesses in the area, the recapture clause is similarly valuable to a landlord. Especially in the case of a location like a shopping center, a business that has gone dark can dissuade other businesses from leasing out nearby property.

Talk to your attorney about these clauses

Whether you are a landlord or a tenant, commercial leases can prove to be very valuable and offer considerable protection. On the other hand, they can also strip you of certain options and remedies, so it is critical that you examine these documents closely with an experienced attorney. With legal guidance, you can negotiate a lease that protects you and minimizes the potential for costly disputes.

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