What is a tenant indemnification clause? Is a tenant indemnification clause helpful to the commercial landlord? California Attorney and Real Estate Broker Chris Adishian answers the question, “Should I have my tenant indemnify me?” at the South Bay Association of Realtors Commercial Attorney Panel on June 2, 2015.
On the indemnity piece, it’s something that’s often talked about quite a bit in a lot of different contractual contexts, including leasing.
As you’re negotiating those things though, you also want to back up and just look at “Does this person that we’re asking or does this entity that we’re asking indemnity from, do they have the capability to pay for that indemnity if it came to pass?”
Very often, landlords have superior resources, superior bargaining power and the tenant can sign off on an indemnity and say “sure I’ll indemnify you if this happens,” but then that happens and the tenant goes “I don’t have any money to pay you that indemnity.” So, that’s just something to keep in mind, is how hard you’re going to negotiate on that point.