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Lease Agreement Analysis

Initial Analysis

ContractStandards analyzed 123 Lease Agreements pulled from  EDGAR from various periods ranging from February 2010 through October 2011.  The table below represents the initial analysis using kiiac contract analysis tools and the Clause Analysis framework.  Many of the very rare clauses (those appearing in less than 10% of the sample set) have been excluded. (see Observations below for comments on the analysis)

Clause Caption Commonality  Consistency Clause Type
Definitions Uncommon Inconsistent Deal-Specific
Summary of Basic Lease Provisions Uncommon Consistent Transaction-Specific
    Premises Uncommon Inconsistent Deal-Specific
    Base Rent Uncommon Consistent Transaction-Specific
    Security Deposit Uncommon Consistent Transaction-Specific
    Guarantor Uncommon Inconsistent Deal-Specific
Premises Common Inconsistent Negotiated
    Lease of Premises Uncommon Inconsistent Deal-Specific
    Acceptance of Premises Common Inconsistent Negotiated
    Common Areas Uncommon Consistent Transaction-Specific
    Vehicle Parking Common Consistent Standard
Term Common Inconsistent Negotiated
    Commencement Date Uncommon Consistent Transaction-Specific
    Term Common Inconsistent Negotiated
    Posession Uncommon Inconsistent Deal-Specific
    Early Occupancy Uncommon Consistent Transaction-Specific
    Delay in Posession Uncommon Inconsistent Deal-Specific
    Early Termination Option Uncommon Inconsistent Deal-Specific
    Holding Over Common Consistent Standard
    Extension Options Common Consistent Standard
Rent Common Inconsistent Negotiated
    Base Rent Common Inconsistent Negotiated
    Base Rent Adjustments Uncommon Inconsistent Deal-Specific
    Additional Rent Common Inconsistent Negotiated
    Payments Uncommon Inconsistent Deal-Specific
    Operating Expenses Uncommon Consistent Transaction-Specific
    Taxes Common Consistent Standard
    Late Charges Common Consistent Standard
    Operating Expense Payments Uncommon Consistent Transaction-Specific
Security Deposit Common Consistent Standard
Use Common Inconsistent Negotiated
    Permitted Use Common Inconsistent Negotiated
    Prohibited Uses Uncommon Inconsistent Deal-Specific
        Auctions Uncommon Consistent Transaction-Specific
    Rules And Regulations Uncommon Inconsistent Deal-Specific
    Compliance with Laws Common Inconsistent Negotiated
    Hazardous Substances Common Consistent Standard
Rights of Landlord Uncommon Inconsistent Deal-Specific
Entry by Landlord Common Inconsistent Negotiated
    Access Uncommon Consistent Transaction-Specific
Services and Utilities Common Consistent Standard
    Utilities Uncommon Inconsistent Deal-Specific
    Security Uncommon Inconsistent Deal-Specific
    Standard Tenant Services Uncommon Inconsistent Deal-Specific
    Overstandard Tenant Use Uncommon Consistent Transaction-Specific
    Additional Services Uncommon Inconsistent Deal-Specific
    Interruption of Use Uncommon Consistent Transaction-Specific
    Telecommunications Uncommon Consistent Transaction-Specific
    Electricity Uncommon Inconsistent Deal-Specific
    Water Uncommon Consistent Transaction-Specific
Maintenance and Repairs Common Inconsistent Negotiated
    Tenant s Obligations Common Inconsistent Negotiated
    Landlord s Obligations Common Inconsistent Negotiated
Alterations Common Consistent Standard
    Landlord s Consent to Alterations Uncommon Consistent Transaction-Specific
    Manner of Construction Uncommon Inconsistent Deal-Specific
    Liens Common Consistent Standard
    Landlord s Property Uncommon Consistent Transaction-Specific
Insurance Common Consistent Standard
    Liability Insurance Uncommon Consistent Transaction-Specific
    Tenant's Insurance Common Inconsistent Negotiated
    Form of Policies Uncommon Consistent Transaction-Specific
    Landlord's Insurance Common Consistent Standard
    Waiver of Subrogation Common Consistent Standard
    Additional Insurance Obligations Uncommon Consistent Transaction-Specific
Damage or Destruction Common Consistent Standard
    Definitions Uncommon Inconsistent Deal-Specific
    Repair of Damage to Premises by Landlord Uncommon Consistent Transaction-Specific
    Abatement of Rent Uncommon Consistent Transaction-Specific
    Damage Near End of Term Uncommon Inconsistent Deal-Specific
    Waiver of Statutory Provisions Uncommon Consistent Transaction-Specific
Condemnation Common Consistent Standard
    Total Taking Uncommon Consistent Transaction-Specific
    Partial Taking Uncommon Consistent Transaction-Specific
    Award Uncommon Consistent Transaction-Specific
    Temporary Taking Uncommon Consistent Transaction-Specific
    Restoration Uncommon Consistent Transaction-Specific
Indemnification Common Consistent Standard
    Tenant's Indemnity Uncommon Consistent Transaction-Specific
    Landlord Indemnity Uncommon Consistent Transaction-Specific
Limitation on Liability Common Inconsistent Negotiated
Tenant s Covenants Uncommon Inconsistent Deal-Specific
Assignment and Subletting Common Consistent Standard
    General Prohibition Uncommon Inconsistent Deal-Specific
    Transfers Uncommon Inconsistent Deal-Specific
    Landlord s Consent Uncommon Inconsistent Deal-Specific
    Transfer Premium Uncommon Inconsistent Deal-Specific
    Permitted Transfers Common Consistent Standard
Representations and Warranties Uncommon Inconsistent Deal-Specific
Bankruptcy Uncommon Inconsistent Deal-Specific
Signs Common Inconsistent Negotiated
Subordination Common Consistent Standard
    Subordination Uncommon Consistent Transaction-Specific
    Attornment Uncommon Consistent Transaction-Specific
Estoppel Certificate Common Inconsistent Negotiated
Quiet Enjoyment Common Consistent Standard
Right of First Refusal Uncommon Consistent Transaction-Specific
Rights to Expand Uncommon Inconsistent Deal-Specific
Option to Purchase Uncommon Consistent Transaction-Specific
Surrender of Premises Common Consistent Standard
    Surrender of Premises Uncommon Inconsistent Deal-Specific
    Removal of Tenant Property by Tenant Uncommon Inconsistent Deal-Specific
Default and Remedies Common Inconsistent Negotiated
    Tenant s Default Common Consistent Standard
    RIGHT OF LANDLORD TO PERFORM Uncommon Inconsistent Deal-Specific
    Late Payment Rent Uncommon Consistent Transaction-Specific
    Remedies Uncommon Inconsistent Deal-Specific
    Cumulative Remedies Uncommon Inconsistent Deal-Specific
    Landlord Defaults Common Inconsistent Negotiated
    Landlord s Remedies Common Inconsistent Negotiated
Letter of Credit Uncommon Consistent Transaction-Specific
Landlord s Lein Uncommon Inconsistent Deal-Specific
Miscellaneous Common Consistent Standard
    Prorations Uncommon Consistent Transaction-Specific
    No Waiver Common Inconsistent Negotiated
    Notices Common Consistent Standard
    Force Majeure Common Inconsistent Negotiated
    Severability Common Inconsistent Negotiated
    Waiver of Jury Trial Uncommon Inconsistent Deal-Specific
    Entire Agreement Common Consistent Standard
    No Air Rights Uncommon Inconsistent Deal-Specific
    Transfer of Landlord s Interest Uncommon Inconsistent Deal-Specific
    Prohibition Against Recording Uncommon Inconsistent Deal-Specific
    Financial Information Uncommon Consistent Transaction-Specific
    Relationship of Parties Uncommon Inconsistent Deal-Specific
    Cumulative Remedies Uncommon Inconsistent Deal-Specific
    Headings Uncommon Inconsistent Deal-Specific
    Successors and Assigns Common Inconsistent Negotiated
    Joint and Several Liability Uncommon Inconsistent Deal-Specific
    Not Binding Until Executed Uncommon Inconsistent Deal-Specific
    Interpretation Uncommon Inconsistent Deal-Specific
    Landlord s Title Uncommon Consistent Transaction-Specific
    Time of Essence Common Inconsistent Negotiated
    Recordation Common Inconsistent Negotiated
    Limitations on Interest Uncommon Consistent Transaction-Specific
    Brokers Common Inconsistent Negotiated
    Governing Law Common Inconsistent Negotiated
    Authority Uncommon Inconsistent Deal-Specific
    Attorney Fees Common Consistent Standard
    OFAC Uncommon Consistent Transaction-Specific
    Incorporation by Reference Uncommon Consistent Transaction-Specific
    No Accord and Satisfaction Uncommon Consistent Transaction-Specific
    Survival Uncommon Inconsistent Deal-Specific
    Confidentiality Uncommon Inconsistent Deal-Specific
    Counterparts Uncommon Inconsistent Deal-Specific
    Independent Covenants Uncommon Inconsistent Deal-Specific
    Financial Statements Uncommon Inconsistent Deal-Specific
    Hazardous Activities Uncommon Consistent Transaction-Specific
    Hazardous Materials Uncommon Inconsistent Deal-Specific
    Exhibits Uncommon Inconsistent Deal-Specific
    Transportation Management Uncommon Inconsistent Deal-Specific
    Relocation Uncommon Consistent Transaction-Specific
    Amendments Uncommon Inconsistent Deal-Specific
    Modification of Lease Uncommon Inconsistent Deal-Specific
    Termination; Merger Uncommon Consistent Transaction-Specific

Observations 
The analysis of the top level clauses reveals somewhat expected results for many of the clauses that one would expect to see in a lease.  Clauses such as Hold Over, Insurance, Assignment and Subletting and Quiet Enjoyment are all highly common and highly consistent, indicating that the clauses and language are relatively standard.  However, these clauses are not entirely standardized as many of the subclauses that make up some of these standard top-level clauses, such as those under Subletting and Assignments, Defaults and Remedies or Use, are deal-specific or transaction-specific.  This would indicate some degree of customization from lease to lease, even with the relatively standard clauses.

Additionally, analysis of some clauses do not align with expectations.  For example, one would expect an Entry by Landlord clause to be Standard as opposed to Negotiated.  Conversely, one would expect Security Deposit clauses to be Negotiated (since the amount is likely to change from deal to deal) as opposed to Standard.  ContractStandards investigates these inconsistencies in the individual clause analyses.
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