This isn’t going to be a very satisfactory posting to those who like certainty.
How much does a tenant lose when its exclusive use rights are violated? No one knows because it can’t be known. Why is that – it’s because the crystal ball is broken. What’s more, you can’t even be sure that there will be a loss.
Let’s start with the second assertion, i.e., maybe there won’t be a loss. Perhaps, sales of the “exclusive” items will increase. Here’s the scenario for an increase. Assume that the store is located at less than vibrant shopping center and the “protected” tenant is selling $150 per square foot, year after year. Now, along comes a [Read more...]
With the help of some readers, Ruminations is spiraling in on a unified theory about remedies a “violated tenant” might have against its landlord and others for the breach of an exclusive use right granted to the violated tenant in its own Lease. We’re going to start with possible remedies against the landlord because that’s the most discussed facet of this topic when reaching a deal and when negotiating a lease. The agreed-upon remedies are important to lenders and buyers as well because what is agreed-upon can affect the economics of sales and financing transactions. For an example, think about the effect on the shopping center buyer in the Office Depot case discussed in the Ruminations entry of July 25, 2011. 
Are we junking up our leases and other agreements with provisions that may not even be remotely related to the real deal? Today, we’ll beat up on the creeping incursion of confidentiality provisions in ordinary lease forms. But, that’s only a poster child to argue how far off the beaten trail we’ve headed. 
This isn’t the kind of posting that will be of interest to a lot of readers. It’s kind of a “head” piece.
What part of an eminent domain award should belong to a tenant? We’ll save you the trouble of scrolling down to the bottom – we think it is the portion attributable to the leasehold value of its lease. What is that? If you don’t know already, you’ll have to start scrolling.
Here’s a “bonus” posting, but you’ll need to decide if “bonus” is the right description. This is somewhat autobiographical but, as they say, “write from your own life experience.” This week we received two notices that were sent to us by certified mail. That’s not unusual because we often receive notices by certified mail. After all, we are named in many documents as a secondary, but required, place to where notices must be sent. What was unusual was that the certified mail envelopes themselves were inside a larger envelope that was mailed to us, by ordinary mail, directly from the original sender of the notices. The original notices were mailed on March 9. We eventually received them on April 16. 
Bottoms up! Or, said otherwise, let’s start with the bottom line. ON BALANCE, you’d rather be an additional insured on someone else’s liability policy, not an additional named insured. For one, it isn’t even clear what is meant by “additional named insured.” There is a named insured and there is an additional insured. There are also some people who are automatically insured. (Those are employees and other people similarly related to a named insured.)
Following last week’s posting about what Ruminations would call a misunderstanding regarding the economic theory behind the freedom to assign a lease, we received some calls to discuss how an assignment differs from a sublease. Given the frenetic activities involved in getting ready for this past weekend, Ruminations was happy to comply by taking advantage of what seemed like easy pickings – republishing a snippet from a piece written in 2008.
Recent Comments