USA – IOWA Law and Practice Contributed by: David M. Erickson, Christopher S. Talcott, Amy S. Montgomery and Shannon M.H. Hasse, Dentons Davis Brown PC
rent payments made as part of operating expenses. However, any services that are provided directly to the tenant, or which are capable of being separately metered, will most often be paid directly by the tenant to the service provider. Services that are not sepa - rately metered or not capable of segregation are gen - erally covered by the operating expenses owed by each tenant. 6.11 Payment of Property Taxes As part of the operating expenses, the landlord will usually collect for reimbursement of property taxes, with the landlord being responsible for paying them directly to the county treasurer; however, payment of property taxes is a negotiated item and payment arrangements can vary with them being included in base rent or, less frequently, paid to the county treas - As part of the operating expenses, the landlord will usually carry extended coverage insurance against loss, damage or destruction by fire or other casu - alty, which will insure the building, most often for an amount not less than the full insurable value on a replacement cost basis. The tenant will ordinarily be required to carry casualty and liability insurance in given amounts depending on the tenancy, protecting the landlord against such things as harm to person or property. The tenant may also be required to insure their personal property within the leased premises. 6.13 Restrictions on the Use of Real Estate A landlord is entitled to restrict the tenant to particular types of use of the property. For example, the land - lord may restrict the tenant to only operating a retail business out of the rented space or may prohibit the tenant from operating certain types of businesses. In almost every lease, the landlord will expressly prohibit the tenant from carrying on any business practice that is a violation of any federal, state or local law, includ - ing criminal laws. 6.14 Tenant’s Ability to Alter and Improve Real Estate urer directly by the tenant. 6.12 Insurance Issues In most commercial leases, a landlord will restrict the manner or type of alterations to the real estate. Fre - quently, the landlord will define a category of “major
alterations”, usually delineated by the cost of the improvements, which can be completed only upon prior written consent of the landlord. For all other alterations, consent is not required. However, in any event the landlord will require that the premises be returned to the same state they were in at the commencement of the tenancy, ordinary wear and tear excepted. The landlord may also set forth that any tenant improvements become the property of the landlord at the expiry of the lease upon the landlord’s election. 6.15 Specific Regulations See 6.3 Regulation of Rents or Lease Terms . 6.16 Effect of the Tenant’s Insolvency In almost all commercial leases, one of the events of default under the lease terms will be the tenant’s insol - vency, bankruptcy or the like. Thus, if the tenant is deemed to be insolvent under the terms of the lease, the landlord would be entitled to pursue its default remedies under the lease. 6.17 Right to Occupy After Termination or Expiry of a Lease A tenant’s right to occupy the rented premises ceases upon expiry of the lease term. A tenant who holds over after the expiry of the lease term can be evicted by summary proceedings. As a general rule, the commercial lease should provide for the scenario in which the tenant holds over with the permission of the landlord since the statute in ques - tion does not directly provide for this situation. Thus, for example, it is advisable to include lease language that creates a month-to-month tenancy. In the context of the agricultural lease, a tenant who holds over and who has not been provided a notice of termination is entitled to remain in possession of the property for an additional year upon the same terms and conditions as the original lease. In the residential setting, a tenant who holds over with permission of the landlord has created a month-to-month tenancy.
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