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Not for Sale

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Anatomy of a Lease 21 include items that are addressed in other sections of the lease agreement, such as facility main- tenance obligations or stipulations on use of the premises. Obligations of the lessee vary based on the type of tenant and operation (e.g., private versus commercial, aeronautical versus non- aeronautical), but will generally include the following language: Conduct and disturbance discussion specifying acceptable code of conduct for facility tenants, employees, customers, and vendor/suppliers. This language typically covers noise, demeanor, and appearance of individuals, vehicles, and equipment; Economic nondiscrimination language for commercial operators that ensures equitable pricing and services; Based aircraft reporting requirements; Other reporting requirements, as stipulated; and Disposal of trash and waste. Along with the disposal of trash, additional wording should be added under this section of a lease agreement to include oils, fluids, or any hazardous waste. Current federal and some local regulations dictate the amount of hazardous material that is permitted to be stored at any one time. Such is the case with aircraft refinishing facilities and the storage of certain waste oils and fluids. Environmental regulations can be complex and change often, so language directing com- pliance with environmental jurisdictions is important. Such a lease clause (i.e., one that is affected by changes in regulation outside of the lessor's control) is also referred to as a living clause. 2.2.13 Security Requirements New leases should reference the Airport Rules and Regulations and require any current or future compliance with aviation-specific, federally-mandated security requirements by the TSA and/or Department of Homeland Security. The lease should also state that security requirements may change as the Homeland Security Threat Advisory Levels change, and, if required, the les- see must adjust operations to reflect the current security requirements. 2.2.14 Damage to Facilities Circumstances and responsibility for repairing damages to facilities during the course of the lease term should be described and outlined in this section of the airport lease. Even if the developer pays the entire cost of agreed-upon improvements to airport land, all parties should understand and agree to the manner in which damages will be repaired should damages occur. Specifically, require- ments for premises insurance should be considered, with clarity as to how insurance proceeds shall be used. The timeframe for which repairs shall be made should also be described fully. The airport sponsor's interest should be well protected in this language, precluding a tenant that is late in the lease term from opting out of its responsibility to repair damaged facilities. Natural disaster, fire, vandalism, and employee abuse should all be considered within this section of the airport lease, clearly identifying the party responsible for repairs in each scenario. This section may also consider provisions for payment of rent in the event of damaged facilities, especially if damages render the leasehold unusable for normal business activity. The airport sponsor should strongly consider the requirement for business interruption insurance so that the tenant has some financial security in the event of significant or catastrophic damage, and so that the airport sponsor is protected from loss of its revenue stream. 2.2.15 Insurance Obligations In order to protect the lessee and the airport sponsor from financial liability arising from the oper- ations of a tenant, insurance requirements should be detailed in all lease agreements. Insurance