Board Resolution for Tenancy Agreement: What it is and Why it Matters

When a company or organization rents a property for commercial use, a tenancy agreement is typically established between the tenant and the landlord. A board resolution is often required by the landlord as part of the tenancy agreement. But what exactly is a board resolution, and why is it necessary for a tenancy agreement? Let`s take a closer look.

What is a Board Resolution?

A board resolution is a formal document that records the agreement of the board of directors of a company or organization. It is typically used to document major decisions or actions that have been approved by the board, such as the signing of a lease agreement for a commercial property.

In the case of a tenancy agreement, a board resolution is often requested by the landlord to confirm that the company or organization has the authority to enter into the agreement. The resolution typically includes the names of the board members who approved the agreement, as well as the date of the resolution.

Why is a Board Resolution Necessary for a Tenancy Agreement?

There are several reasons why a board resolution may be necessary for a tenancy agreement. Firstly, it confirms that the company or organization has the authority to enter into the agreement. This is important as the tenant must have the legal power to enter into a contract on behalf of the organization.

Secondly, a board resolution can be used to provide evidence of the agreement if any disputes arise in the future. The resolution serves as a legally binding document that confirms the terms of the tenancy agreement, and can be used in court as evidence if required.

Finally, a board resolution can help to streamline the leasing process. By providing the landlord with a formal document confirming the agreement, the process of negotiating and finalizing the tenancy agreement can be more efficient, saving time and reducing potential confusion.

How to Prepare a Board Resolution for a Tenancy Agreement

Preparing a board resolution for a tenancy agreement is a relatively straightforward process. The following steps can be used as a guide:

1. Schedule a meeting of the board of directors to discuss and approve the tenancy agreement.

2. Record the key details of the agreement, including the term of the lease, rent, and any other relevant terms.

3. Draft the text of the resolution, including the names of the board members who approved the agreement and the date of the resolution.

4. Approve the resolution at the board meeting, with all board members signing the document.

5. Provide a copy of the resolution to the landlord as part of the tenancy agreement.

Conclusion

In summary, a board resolution is a formal document that confirms the agreement of the board of directors, and is often required as part of a tenancy agreement. By providing evidence of the company or organization`s legal authority to enter into the agreement and streamlining the leasing process, a board resolution can be an important part of any commercial leasing arrangement. If you`re involved in negotiating a commercial lease, don`t overlook the importance of a board resolution – it could save you time and hassle in the long run.