Letters of Credit in Lease Transactions, Drafting Tips: Part II
Susan Fowler McNally, Carter Klein, and Michael Abrams
PROBATE& PROPERTY NOVEMBER/DECEMBER 2002 43 If the landlord allows or requires its tenant to post a letter of credit (L/C), instead of a cash security deposit or prepaid rent, to secure the tenant’s lease obligations, the landlord must consider what form, language, and draw conditions should be contained in the L/C. Using an L/C with the proper format, language, and draw conditions will minimize or avoid problems. The L/C should provide the landlord with a prompt, unrestricted, liquid, and...