Waivers of Landlord Liens/Landlord Security Interests in Tenant Property:
What do the Parties Really Need?
Jack S. Levey, Plunkett Cooney PC, Columbus, Ohio
October 19, 2010
1. Why require a waiver? The lender wants to preserve its right to any collateral owned by the
borrower, which may include fixtures, furnishings, equipment and other personal property located
in premises leased by the borrower.
1.1. Lien States: Some states give the landlord a statutory or common law lien against all personal
property located in the leased premises. This lien may take the form of the common law
remedy of distress (or distraint) for rent.
1.2. Non-lien States: Lenders may want landlord waiver even if the premises are in a state that
does not recognize a landlord lien.
1.2.1. Some leases expressly grant the landlord a security interest in the personal
property. Some landlords will file a UCC-1 to perfect this interest. Others may
wait and perfect the interest by possession if the tenant abandons the premises,
or (if permitted by law) changing the locks or using other forms of self-help.
1.2.2. The lease may provide that any personalty left in the premises when tenant
vacates is deemed abandoned, or is deemed to be conveyed to the landlord.
1.2.3. The waiver can be used to establish procedures for notice, cure of defaults,
removal of the collateral by the lender, and post-termination occupancy of the
2. Lender concerns
2.1. Define the collateral.
2.2. Notify landlord of lender’s security interest.
2.3. Establish priority of lender’s security interest; waive or subordinate landlord’s lien.
2.4. Obtain notice of any lease default by tenant.
2.5. Obtain the right to store the collateral at the premises until it can be removed.
2.6. Obtain right to remove the collateral at any time.
2.7. Recognition that lender is not responsible for rent or other tenant obligations.
3. Tips for tenant.
3.1. Tenant’s main interest is in making sure that both the lender and the landlord or are happy.
3.2. Negotiate in the lease itself for the right to a landlord waiver.
3.3. If the lender has a specific form or unusual requirements, have them approved before the
lease is signed. Once the lease is signed, tenant has less leverage.
4. Landlord concerns.
4.1. Do not wave landlord’s lien, subordinate it.
4.2. Disclaim any obligation to safeguard the collateral – all storage to be at lender’s risk.
4.3. Obtain a disclaimer of any lender rights to inappropriate items: e.g. anything constructed as
part of landlord’s improvements to the premises, or by tenant using construction allowance
furnished by landlord, and non-trade fixtures or items required for operation of the
premises, such as partitions, doors, windows, plumbing fixtures (other than those unique to
tenant’s business), HVAC, non-specialized lighting, etc. (NOTE: waiving landlord’s interest in
some of these items, e.g. HVAC, may violate landlord’s own mortgage obligations.)
4.4. Prevent or minimize:
4.4.1. Any delay in the ability to terminate the lease. Do not agree to any restriction on
the ability to terminate for reasons other than tenant’s acts or omissions. Do not
agree to give lender notice of the natural expiration of the lease.
4.4.2. Number of notices to be given the lender.
4.4.3. Any obligation to provide free storage space.
4.4.4. Interference with reletting.
4.5. Removal of collateral:
4.5.1. Control the time and manner of removing the collateral, e.g. right to direct that it
be removed after business hours or on weekends, or during regular business
hours, and to designate the use of loading docks, service elevators, etc.
4.5.2. Lender should agree to pay for repairing any damage caused by the removal.
4.5.3. Require lender to indemnify landlord for injury, death or property damage,
including injury or death of lender’s personnel or contractors.
4.5.4. Consider requiring lender to furnish evidence of insurance as a condition to
removing the collateral.
4.5.5. Uncommon for lender to agree to pay for landlord’s cost, such as wages of after
hours personnel, dock or elevator fees, etc., other than the repair of damage
caused by the removal.
5. Overreaching by lender.
5.1. Attempting to assert a security interest in sublease rents, license fees or other income paid
for use or occupancy of the premises.
5.2. Insisting on lengthy storage or occupancy rights without paying rent.
5.3. Interfering with reletting the premises.
5.4. Asserting a security interest against anything paid for by the landlord or that legitimately
constitutes part of the building.
(FORM 1 – LENDER’S FORM WITH CHANGES NEGOTIATED BY LANDLORD; FINAL VERSION)
THIS LANDLORD WAIVER (“Agreement”) is made and entered into as of the ____ day of May,
2006 by and among <Landlord Name>, LLC, a____________ limited liability company, having an address
of __________________________________ (“Landlord”); <Tenant Name>, Ltd., a Nevada limited
partnership, having an address of _____________________________, Ohio 43065 (“Tenant”), and
<LENDER NAME>, a national banking association, having an address at _________________________,
Columbus, Ohio 43215 (“Lender”).
A. Landlord and Tenant are parties to a Lease dated the 25th day of February, 2005 (the
“Lease”) for the property as described therein and commonly known as__________________________
Drive, ________, Texas, _____ (the “Leased Premises”).
B. Tenant has requested that the Lender make and extend to Tenant (“Borrower”) certain
loans (the “Loan”), pursuant to the terms of a loan agreement and certain related loan documents (as
amended, extended or renewed from time to time, collectively the “Loan Documents”).
C. As security for the obligations of the Borrower under the Loan Documents, the Tenant
and the Lender will enter into a Continuing Security Agreement (the “Security Agreement”) pursuant to
which the Tenant will grant a lien and security interest to the Lender in all of Tenant’s tangible personal
property, including machinery, equipment and other tangible personal property which is from time to
time located on the Leased Premises (collectively the “Collateral”).
NOW THEREFORE, in consideration of the foregoing recitals and other good and valuable
consideration, the receipt and sufficiency of which are expressly acknowledged, the parties, with the
intent to be legally bound hereby, agree as follows:
1. Landlord’s Waiver.
(a) Any and all security interests, liens, claims, demands, interests or rights,
including but not limited to the right to levy or distrain for unpaid rent or failure to perform,
which the Landlord now has or may hereafter acquire in the Collateral by statute, agreement or
otherwise, shall be subordinate and inferior to the lien or security interest of the Banks therein,
and, as to the Banks, the Landlord waives and relinquishes all rights of levy, distraint or
execution with respect to the Collateral.
(b) Except for those items listed on Exhibit "A", each of which shall in no way be
subject to this paragraph, all or part of the Collateral may be affixed to or installed upon the
Leased Premises but shall remain personal property and shall not constitute an accession,
addition or fixture on or become a part of the Leased Premises until the Tenant’s obligations to
the Banks are satisfied in full, and the Landlord shall acquire no title to or interest in the
Collateral by virtue of any such installation or attachment. The items listed on Exhibit "A" are
leasehold improvements and Landlord's property.
(c) The Lender may, in the exercise of its rights against Tenant, enter upon the
Leased Premises and take immediate possession of the Collateral and sell or otherwise dispose
of the Collateral from the Leased Premises, or remove the Collateral from the Leased Premises
without notice to Landlord, and Landlord will make no objection to such removal or to the
performance of whatever acts are necessary for such removal or sale, provided the Lender shall
repair any damage to the Leased Premises directly resulting thereby. Landlord agrees that, at
the Lender’s option, the Collateral may remain upon the Leased Premises for a reasonable
period of time in order for the Lender to prepare for disposition or removal of, or to remove,
dispose of, or otherwise deal with, the Collateral.
(d) Except as specifically provided herein, no rights or benefits of Landlord under
the Leases shall be affected by this Agreement, including, without limitation, (i) Landlord’s rights
and benefits arising from or related to any insurance required by the Lease, and (ii) Landlord’s
rights to indemnification as set forth in the Lease.
2. Intentionally Omitted. (NOTE: The deleted language, as originally drafted by the lender,
read as follows. The concept of notice was instead inserted into §3, which as originally drafted by the
lender provided for cure rights but not notice: "Notice of Default Under Lease. Landlord hereby agrees to
give the Lender written notice (i) of any default under the Lease, (ii) of any default under any lease or
agreement, if any (herein a “Primary Lease”), pursuant to which Lessor’s leasehold interest in the Leased
Premises is created or exists, and/or (iii) as to any event on the basis of which Landlord intends to declare
a default under the Lease, specifying the details thereof; in each case within ten (10) days after Landlord
learns of any such default or event, and Landlord further agrees to send to the Lender copies of all
communications and correspondence between Landlord and Tenant, and Landlord and any lessor or
counter-party to any Primary Lease; in each case pertaining to any default or event which may result in
the declaration of a default under the Lease or any Primary Lease.”)
3. Lender’s Right to Cure. Notwithstanding anything in the Lease to the contrary, in the
event of a default by Tenant under the Lease, Landlord agrees to provide written notice of such an event
of default, pursuant to the terms stated herein, to allow Lender, without obligation, to cure such default
within thirty (30) days after receipt of such written notification from the Landlord of such default.
Landlord agrees that the Lease shall remain in full force and effect, unrevoked and unmodified, during
such thirty (30) day period so long as the Lender, its agents or representatives, endeavor to cure the
default with due diligence and dispatch and thereafter (absent any subsequent default) so long as said
cure is effected.
4. Representations, Warranties and Covenants. Landlord and Tenant jointly and severally
represent, warrant and covenant to and with the Lender that the Lease is in full force and effect, and
constitutes the entire understanding of Landlord and Tenant with respect to the Leased Premises. There
exists no current default or breach under the Lease by either party, and, to the best knowledge of each
of them, no event has occurred at this time which could constitute an event of default or breach
thereunder, with the giving of notice, the passage of time, or both.
(a) This Agreement shall inure to the benefit of the Lender, and its successors and
assigns, and shall be binding upon the heirs, executors, personal representatives, successors and
assigns of Landlord.
(b) All notices, elections, requests, demands and other communications hereunder
shall be in writing and shall be deemed given upon the actual receipt thereof if personally
delivered or deposited in the United States Mail, by certified or registered mail, postage
prepaid, addressed to the parties at their addresses given in the preamble hereto (or to such
other person or place as to which any party shall have given notice to the others).
(c) This Agreement shall be governed in all respects by the laws of the State of
(d) The provisions of Section 9, pages 5-6 of the Lease shall in no way be altered,
limited or otherwise affected by this Agreement.
6. Additional Requirements. In the event of Lender taking possession of the property to
which it retains a secured interest that is not affixed to the Leased Premises, Lender agrees to remove
such property within thirty (30) days after Lender's thirty (30) day cure period, provided in Section 3 of
this Agreement, and in the event removal does not occur within such time, Lender shall pay Landlord a
storage fee equal to the rental rate required under the Lease. Any damage caused as a result of such
removal will be repaired by Lender at Lender's expense in a professional and workmanlike manner.
(The following exhibit originally appeared on a separate page)
List of Leasehold Improvements and Fixtures That Are Landlord's Property and Not Part of the Attached
1. Intact and working leasehold improvement of heavy electric service with attached upgrade
similar to the attached bid by Spoon bid by Spoon Electric for 480 V Service;
2. All low bay 250 watt metal halide fixtures and related lighting equipment for these fixtures;
3. All electric wiring, circuit breakers and related service, all plumbing, all lighting and light fixtures,
all installed fixtures including water, heater, A/C units, heating unit s, and any other related fixtures and
(Thank you to Gilbert L. Gates of Keziah Gates LLP, High Point, NC for supplying the following forms)
THIS AGREEMENT, made as of *, between * (the "Landlord") and *, a banking corporation (the
WHEREAS, Landlord owns premises located at *, *, North Carolina (the "Premises"), which are leased
to * (the "Debtor"), under a lease dated * (the "Lease"). Lender has entered into or is about to enter into
certain financing agreements with the Debtor pursuant to which Lender has been or will be granted a
security interest in Debtor's personal property including, but not limited to, furnishings, inventory and
equipment (the "Personal Property"). Certain items of the Personal Property are or may become affixed to
or located at the Premises.
NOW, THEREFORE, in consideration of any financial accommodation extended by the Lender to the
Debtor, at any time, and other good and valuable considerations, the parties agree that:
1) Subordination. Except with respect to alterations and improvements to the Premises by the Debtor
which, pursuant to the provisions of the Lease, become the property of the Landlord upon the
expiration or termination of the Lease (the "Improvements"), and which are expressly excluded from
the operation of this agreement, the Landlord agrees that any landlord's lien, right of levy or distraint
or security interest that the Landlord now has or may acquire in any of the Personal Property for rent
or other claims of any nature under the Lease shall be subject and subordinate to a valid and perfected
security interest of the Lender in the Personal Property (the "Lender's Security Interest").
Notwithstanding the foregoing, this subordination shall not apply to any lien or claim which the
Landlord acquires as a judgment creditor.
2) Personal Property. Except for the Improvements, which shall be conclusively deemed to be fixtures
and to have become part of the realty, none of the Personal Property shall be deemed a fixture or part
of the real estate but shall at all times be considered personal property.
3) Notice of Default. Landlord will give Lender duplicate notice of any notice of default which Landlord
sends to Debtor as Tenant under the Lease, in the manner and at the address stated in Paragraph 6,
4) Right to Cure. Landlord will permit Lender to cure any default by Tenant under the Lease during any
period when the Tenant would be entitled to do so under the terms of the Lease, and for * days after
the expiration of such period. Lender shall not be obligated to cure any default of Tenant under the
5) Lender's Right of Use and Occupancy. If the Debtor defaults in its obligations to the Lender and the
Lender elects to enforce Lender's Security Interest in the Personal Property, the Lender may, at its
option, and upon and subject to the terms and conditions stated in this paragraph, use and occupy the
Premises notwithstanding any termination of the Lease, or of Debtor's right to possession under the
Lease, for the sole purpose of repossessing, storing and removing the Personal Property, and for no
other purpose, for a period of up to 30 days after termination of the Lease or Debtor's right to
possession. The Lender's right to use and occupy the Premises for the purposes above stated is
granted upon and subject to the following terms, covenants and conditions, each of which shall
survive the termination of this agreement until fully performed by Lender:
a) Lender's use and occupancy of the Premises shall be as a licensee only, pursuant to the terms of
this agreement, and nothing in this agreement creates the relationship of landlord and tenant or
bailor and bailee between Lender and Landlord.
b) Lender must pay all rent and other charges which the Tenant would have been obligated to pay
under the Lease had the Lease continued for the period of Lender's use and occupancy, computed
on a per diem basis at the rate provided for in the Lease, for the period of its use and occupancy
after termination of the Lease or termination of the Debtor's right to possession under the Lease.
c) Lender, pursuant to Lender's Security Interest, shall be entitled to repossess and remove the
Personal Property from the Premises; provided, however that: (i) Lender agrees to repair any
damage to the Premises caused by such removal, or otherwise caused by any negligent or
intentional act or omission of Lender's agents, employees, contractors or invitees; and (ii) Upon
termination of Lender's use and occupancy of the Premises, Lender will cause all of the Personal
Property to be removed from the Premises and return the Premises to Landlord "broom clean"
and otherwise in the same condition as when received, ordinary wear and tear excepted.
d) Lender's use and occupancy of the Premises shall be at Lender's sole expense, risk and liability.
Lender releases Landlord from any and all liability for damage to or loss of the Personal Property,
and agrees to protect, indemnify and save harmless Landlord from, and to defend Landlord
(through counsel reasonably acceptable to Landlord) against, any and all claims, liabilities, losses,
or damages arising out of or connected with Lender's use and occupancy of the Premises, unless
caused solely by the gross negligence or intentional misconduct of Landlord.
6) Notices. All notices required or permitted by the terms of this agreement must be in writing and shall
be deemed given only three days after the date when deposited in the United States Registered or
Certified Mail, Postage Prepaid, or, with verification of delivery, when received by telegram, cable,
telex, commercial courier or any other generally accepted means of business communication, to either
party, at the address set forth below for such party. Either party may change the address to which
notices must be sent by giving notice to the other party in accordance with this paragraph. The initial
notice address for each party is as follows:
7) Miscellaneous. This agreement: (i) shall remain in full force and effect until the earlier of (A) the
termination of the Lease or the Debtor's right to possession under the Lease, plus any additional
period after such termination during which Lender may be entitled to occupy the Premises upon the
terms stated in this agreement or (B) the satisfaction of Debtor's obligations to Lender with respect to
the Personal Property; (ii) binds and inures to the benefit of the parties and their respective successors
and assigns; (iv) may not be modified except by a written instrument signed by both parties; and (v)
shall be governed by and construed and enforced under the internal laws of North Carolina, and the
parties agree that * County, North Carolina shall be the exclusive forum for litigation of any disputes
which may arise under this agreement.
Sample Landlord-Oriented Insertions
Nothing in this agreement shall require Landlord to give any such notice prior to expiration of
the term of the lease, nor require Landlord to permit any property of Borrower, whether or not claimed
by Lender as collateral, to remain on the premises after expiration or termination of the lease, provided
Lender is given the 30 day advance written notice of any termination which is to occur prior to the
natural expiration of the lease term (or any renewal term).
Landlord hereby grants Lender access to the premises upon reasonable prior notice to Landlord
in each instance, for the sole purpose of allowing Lender to remove any property subject to Lender's
security interest with the understanding that the Lender shall have the obligation to repair. Lender shall
coordinate its entry and removal with Landlord. Lender will abide by all reasonable rules, regulations or
directives of Landlord in connection with any such entry or removal, and, if so required by Landlord,
shall conduct the entry or removal during days or hours when the Project is not open to business for the
public. Lender agrees to repair (or, at Landlord’s option, to reimburse Landlord for the cost of repairing)
any damage caused to premises or the Project during the removal of any property. Lender agrees to
indemnify and defend Landlord and its officers, agents, employees and contractors and all other tenants
and occupants of the Project and hold each of them harmless from and against any and all liabilities,
claims, damages, losses and expenses due to or arising from any: (i) claim by Borrower arising out of the
granting of access to Lender or permitting Lender to take possession of any property of Borrower; or (ii)
act or omission of Lender or any of its employees or contractors; or (iii) or loss of or damage to any
property claimed by Lender as collateral, it being agreed that any such property is present at the sole
risk of Lender and Borrower; or (iv) personal injury or property damage to Lender or any of its officers,
agents, employees or contractors. Nothing in this Agreement is intended to require Lender to
indemnify, defend or hold harmless any person or entity to the extent that the liabilities, claims,
damages, losses or expenses in question arise out of the negligence or willful misconduct of the person
to be indemnified or that of any person or entity for whose negligence or misconduct the person or
entity to be indemnified is legally responsible.
Landlord agrees that Lender may enter the Leased Premises during the term of the Lease,
subject to such reasonable requirements as Landlord may impose from time to time for the operation of
the Project (and Lender acknowledges that entry during normal business hours may be limited,
restricted or prohibited), to inspect or remove any of the Collateral without charge. Landlord will not
hinder Lender’s actions in enforcing its liens and remedies with respect to the Collateral during the term
of the Lease. Lender acknowledges that the Project is used as a convention center and that the Center is
used as a retail facility adjunct to that convention center. Lender agrees that adherence to and
compliance with Landlord’s requirements for operation of the Project and the Center (including but not
limited to any restrictions on the time, place, route and manner of removing the Collateral) shall not bee
deemed as hindering Lender. Landlord agrees that Lender will be permitted access to the Leased
Premises during normal business hours for the purpose of inspecting the Collateral.
Under no circumstances shall Lender remove any item of Collateral that is connected to the
plumbing, heating, ventilation or air conditioning system of the Project, or that is directly connected to
the electrical or telephone systems of the Project (except for connection by inserting an ordinary
removable plug into a socket intended to permit rapid connection and disconnection), nor any item that
cannot be removed without damage to the Leased Premises, the Center or the Project, or that is
necessary for the occupancy and enjoyment of the Leased Premises (as opposed to those items used
only in the operation of Tenant’s business conducted in the Leased Premises), including but not limited
to lighting fixtures, plumbing fixtures, sinks, tubs, or controls or accessories for any of the foregoing.
Lender will promptly repair (or at Landlord’s option reimburse Landlord for the cost of
repairing), in good and workmanlike manner, any and all damage caused to the Leased Premises, the
Center or the Project resulting from Lender’s entry, removal or other activities under this Agreement.
Lender shall make any such repairs in full compliance with all applicable laws and codes, including but
not limited to the Ohio Prevailing Wage Act.
If Landlord shall fail to perform any covenant, term or condition of this agreement upon
Landlord’s part to be performed and, as a consequence of the default, Lender shall recover a money
judgment against Landlord, the judgment shall be satisfied only out of the proceeds of sale received
upon execution of the judgment and levy thereon against the right, title and interest of Landlord in the
Center, and Landlord shall not be liable for any deficiency. It is agreed that in no event shall Lender have
any right to levy execution against any property of Landlord other than its interest in the Center and the
rents or other income therefrom.