OPEN LISTING: L.B. Stone Properties Group, “LBS,” offers an Open Listing to all brokers for a number of properties under its own management and ownership. LBS desires to work with all licensed real estate brokers in regards to its available properties. Subject to the terms and conditions of this policy, LBS will pay a commission to any broker whose direct services result in the lease of an LBS property.
LBS reserves the right to withdraw any property from the market. LBS reserves the right to negotiate and solicit directly with unregistered prospective tenants. LBS may refuse to lease to any prospective tenant for any lawful reason which it believes sufficient.
REGISTRATION OF PROSPECTIVE TENANTS: To be eligible to receive a commission for any lease, a broker must have completed and delivered to LBS the attached registration form with respect to such prospective tenant. Each registration form must be signed by the prospective tenant and the broker. The written acceptance of a registration form by LBS shall establish an open listing between LBS and the broker for the lease of the property outlined in the registration form to the prospective tenant named in the registration for a period of ninety (90) days from the date of LBS’s signature on the registration form. A registration may be extended for additional periods up to ninety (90) days by the broker’s submission and LBS’s approval of a new registration form.
If LBS receives an inquiry from a second, i.e. competing broker to register the same prospective tenant with respect to the same property during the registration period of the original broker, LBS will reject such registration unless the prospective tenant has completed the competing broker’s registration and has notified LBS, in writing, that it has cancelled its relationship with the previously registered broker.
If a lease agreement has not been executed by a registered prospective tenant before the expiration of the registration period or before the termination of a broker’s representation of the prospective tenant, LBS shall have no further obligation to that broker with respect to any lease to said prospective tenant. Upon such expiration or termination, LBS or a competing broker may negotiate with the prospective tenant named in the expired or cancelled registration to secure an acceptable lease.
CONDITIONS TO PAYMENT OF A COMMISSION: A broker shall be entitled to receive, and LBS shall be obligated to pay, a commission only when all of the conditions of this commission policy have been satisfied:
- The tenant and LBS have each executed and delivered a binding and enforceable lease agreement (the “lease”) for LBS property;
- The tenant has approved of any plans and specifications for any building or the leasehold improvements, and if applicable, the amount of base rent to be paid by the tenant have been determined and agreed upon, and all conditions precedent to the tenant’s obligation to pay for any new construction have been satisfied;
- All conditions precedent to the obligations of both parties under the lease have been satisfied (including, without limitation, the issuance and delivery of all required consents, notices, certificate of insurance, deposits, prepaid base rents and operating expenses, permits, corporate resolutions, guarantees and subordination, non-disturbance, lease commencement date and attornment agreements); and
- The tenant has taken occupancy of the property and paid their first month’s base rent and operating expenses (in addition to any deposit required), if not previously paid.
AMOUNT OF LEASE COMMISSION: The amount of the commission payable upon fulfillment of the above conditions related to a lease shall be four percent (4%) of base rents payable for the first sixty (60) months of the initial lease term, and two percent (2%) of the base rent payable for that portion of the original lease term from the sixty-first (61st) month through the one hundred twentieth (120th). No commission shall be payable for any portion of the lease term beyond one hundred twenty (120) months. The foregoing commission schedule does not apply to new build-to-suit projects, as to which commissions are negotiable. When all conditions to payment of a commission have been completed, and provided that the tenant is not then in default of any of its lease terms and conditions, LBS shall pay broker the earned commission under Net 30-day payment terms.
For leases with defined annual base rent increases tied to Consumer Price Index (CPU) adjustment, brokers commission shall be calculated based on the minimum as stated in the lease and at a maximum of 3% of the annual base rents.
If the lease includes an option or options to renew and a renewal option is exercised, then, on the commencement of the exercised option term, the payment of the first month’s base rent and operating expenses for such option term and submission by broker of an invoice to LBS for commission due on option period within 90 days of commencement of option term, LBS will pay a commission based on the following schedule:
- Three percent (3%) of the base rent payable for the portion of such option term up to sixty (60) months from the initial commencement date of the lease (the original lease start date).
- One- and one-half percent (1.5%) of the base rent payable for the portion of such option term beginning with the sixty-first (61st) month to the one hundred twentieth (120th) month from the initial commencement date of the lease (the original lease start date).
In no event shall commissions be paid for any base rent payable for the original term and exercised option terms(s) exceeding one hundred twenty (120) months from the initial commencement date of the lease (the original lease start date). Nor shall a commission be paid on the following:
- Any rent payable during any renewal option or any other extension of the original term beyond ten years.
- Any rent payable as a result of tenant’s subsequent expansion;
- Any payment made by tenant to reimburse LBS for operating expenses, taxes, insurance or similar items, regardless of whether they are site-specific or pro rata with other tenants;
- Any payment made by tenant to LBS or a third party toward the cost of construction or renovation of the premises including reimbursement to LBS over an extended term;
- Any conditional rent escalation, (i.e. the amount not fixed in the lease) regardless of whether based on any type of index or tenant’s revenues, production, etc.;
- Any concession or inducement made at LBS’s expense in connection with the lease, including, without limitation, any rent concessions or abatements; to
- Any rent due to a third party which LBS agrees to pay or allow the tenant to offset, resulting from a lease or occupancy agreement the tenant has with another landlord, sometimes referred to as a “takeover agreement” or “lease buy out;” any tenant moving expenses paid by LBS and any unreimbursed expenses for tenant improvement shall be deducted from the rent on which the commission is based.
BROKER’S AUTHORITY: Upon full execution of a registration form by the broker, the prospective tenant, and by LBS, broker is authorized to show and/or present the described LBS property, including improvements thereto, to the prospective tenant and may discuss rental rates, terms, or other conditions they believe would be appropriate; however, broker shall have no authority to bind LBS to any rental rates, terms, or other lease conditions.
RESOLUTION OF DISPUTES: In the event competing claims are made against LBS for all or any portion of a commission in connection with any lease, LBS may either: (a) defer payment until the competing claims have been resolved, (b) pay the amount of any commission due into court pending final resolution of the competing claims, (c) decline to pay if all conditions have not been satisfied, or (d) mediate under the commercial arbitration rules of the American Arbitration Association. In no event shall LBS be obligated to pay more than one commission for any lease or sale.