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
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 par - ticular types of use of the property. For example, the landlord may restrict the tenant to only oper - ating 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 viola - tion of any federal, state or local law, including criminal laws. 6.14 Tenant’s Ability to Alter and Improve Real Estate In most commercial leases, a landlord will restrict the manner or type of alterations to the real estate. Frequently, the landlord will define a category of “major alterations” , usually deline- ated 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 ten - ancy, ordinary wear and tear excepted. The land - lord may also set forth that any tenant improve - ments 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 insolvency, 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 pro - ceedings. 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 question does not directly provide for this situation. Thus, for exam - ple, 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 provid - ed 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. 6.18 Right to Assign a Leasehold Interest A tenant is freely permitted to sublet or assign a lease unless prohibited by the terms of the lease. Where landlord consent is required, the law may impose a requirement that the land - lord’s consent not be unreasonably withheld. Typical conditions include the financial viability of the tenant, compatibility of the proposed use, and the original tenant remaining jointly liable with the assignee for performance of the tenant’s lease obligations.
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