Letters of Credit (Part III) Controlling a Landlord's Right to Draw on the Letter

In an earlier News ReLease, titled “Security Deposit Insecurity,” we discussed the benefits to commercial landlords of letters of credit in preference to security deposits, advance rent, guarantees, and indemnity agreements. In a follow-up News ReLease, titled “The ABC’s of a Letter of Credit,” we elaborated on the nature of letters of credit and discussed certain features a landlord will want the letter to contain. This News ReLease completes the discussion, addressing tenants’ legitimate concerns that their landlord not obtain the funds held under the letter of credit unless they are actually entitled to them under the lease.

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