Purpose of a Landlord Waiver?

Question

Last week I made an offer on a commericial office building with one tenant, a dentist, which was accepted. We are in escrow. The lease agreement with the seller/dentist has a Landlord Waiver attached to it. I am not familar with such a Waiver. It appears it will continue to be in effect once I become the new Landlord.

What is the real purpose of a Landlord Waiver? Is it to benefit the lender more than the owner/landlord? TIA

What is the real purpose of a Landlord Waiver?  Is it to benefit the lender more than the owner/landlord?  TIA

Charles Carillo · Answer

@Mark Kille

When purchasing a property, you will inherit all leases from the current owner. When tenants are obtaining financing, it is usually required that they have their landlord sign a Landlord's Waiver. The waiver benefits the tenant's lender and is a waiver of the landlord's lien rights to the tenant's personal property and/or equipment.

The main sections that SHOULD be in the waiver; description of the collateral (should be specific), notice of removal (require written notice of removal and a period/timeframe for removal of collateral), monthly rent or use and occupancy (tenant doesn't pay, then lender pays until they repossess the collateral), indemnification, insurance, no auctions at the leased premises (so your property does not turn into an auction house) and usually there are some other rules.

Make sure to have your attorney review all leases and waivers prior to purchasing the property.

Mark Kille · Answer

@Charles Carillo

Thank you Charles. This is very helpful. Cheers!