What is the purpose of a recapture provision in a lease agreement?

The purpose of a recapture provision in a lease agreement is to enable the landlord to recover space not occupied or subleased by the tenant. This provision is particularly significant in commercial leases where the space may have substantial value. It allows the landlord to regain control of the leased premises if the tenant is not utilizing the space as agreed, thus preventing long-term vacancies or underutilization of valuable property.

This provision is beneficial to landlords as it helps them maintain a steady income flow and ensures that they can manage their property effectively. It allows for the possibility of re-leasing the space quickly to new tenants, which can mitigate financial losses associated with unoccupied units. This is essential for maintaining the property’s overall profitability and market value.

Other choices do not align with the primary intent of a recapture provision. For instance, while tenants may seek to negotiate lower rent, the recapture provision itself does not provide a mechanism for this. Similarly, while tenant improvements can certainly be included in lease agreements, they do not directly relate to the concept of recovering previously leased space. Lastly, limiting the duration of tenant occupancy is more of a leasing term rather than a specific recapture mechanism.