We were planning a family Thanksgiving turkey-centric dinner and ice cream as a dessert came to mind. Now, in our world, turkey and real ice cream don’t play together well, so the gears cranked on. What was the appeal of ice cream? Well, to figure that out, we flew to 30,000 feet for an overview. At that altitude, you can’t tell ice cream from any other frozen dessert. And, when we in the “doing leases” business think of frozen desserts, we think of a 1988 court decision. [Well, not really, but a good story is always a good way to start a Ruminations blog posting.] The case we thought about is: Draper and Kramer, Inc. v. Baskin Robbins, Inc. out of the U.S. District Court for the Northern District of Illinois. The decision can be seen by clicking HERE. [Read more…]
Way back in July of 2012, we Ruminated about the enforceability of a letter of intent (LOI). Last month, we revisited the subject at a presentation to the International Council of Shopping Center’s Law Conference in Phoenix. There, five possibilities were explored, one of which was that an LOI imposed an obligation on the parties to negotiate in good faith even if the terms of the LOI weren’t otherwise binding on the parties. Today, we’re going to expand on that “good faith obligation to negotiate” concept because that is the most likely decision a court would reach. To see the entire 2012 blog posting and read about the other four possible outcomes, click: HERE.
There are more than a few court decisions with the outcome that entering into an LOI imposes the duty to negotiate in good faith. They don’t require that the parties ever reach an agreement, only that they really try to do so. Last month (October 27, 2015 to be more precise), a Delaware Superior Court decision was published and it dealt with just this point. The facts were complicated, but not complex. The decision didn’t go to the merits of the case, leaving the parties to fight over the facts, but it did explain this aspect of the law pretty well. For those whose appetite has been whetted (archaically speaking) and want to see the court’s decision, click: HERE. [Read more…]
Last week Ruminations wrote about the legal niceties involved when a lease says: “Landlord will not lease for the sale of widgets” as contrasted with saying “Widgets can’t be sold at the property.” Today, again writing about use restrictions, we’ll be less “legal,” but not entirely so.
Basically, there is a difference between banning a particular kind of business and banning a particular activity. In simple terms, by way of example, there is a difference between saying that no one can operate an office supply store and saying that no one can sell office supplies (or staplers). We’ll illustrate the issues involved by reference to a May 22, 2015 Florida District Court of Appeal’s decision. It isn’t the best example because of the political and social baggage the case carries, but that may also be why it is a good example. The political and social aspects are not up for discussion in this forum. That’s enough mystery: the case is Planned Parenthood of Greater Florida v. MMB Properties and the decision can be seen by clicking HERE. [Read more…]
An “evergreen” (or timeless) discussion topic at law conferences, such as the recently concluded ICSC Law Conference in Phoenix (a highly, highly recommended annual event) is the “exclusive use clause.” We’ve written about exclusive use restrictions, too many, many times, too many to furnish only a link or two. [If you want to see one or more of those postings, use “exclusive use” in the search box.] Today, we’ll talk a “little” law and we’ll throw in a bonus at the end.
Basically, Ruminations will look at the difference between writing “Landlord will not …” and “No part of the Property may be used … .” [Read more…]
Last week, Ruminations advocated that a lease giving the tenant a right to extend the term should include a provision wherein the landlord can/must send a “reminder” to the tenant that the extension option date was about to occur or had already occurred. [For those who haven’t yet looked at last week’s blog posting discussing some aspects of a lease extension option, it can be seen by clicking: HERE.] We also tacked on a specimen lease provision doing just that.
[Oh, Yes – we’ll explain Horace Walpole at the end of today’s posting.]
It would be fair to ask about the key features of a “reminder” provision. One very key aspect is that a landlord should be able to have the lease end at the agreed-upon time if its tenant doesn’t elect to exercise it extension option. So, a landlord should be able to send the reminder notice 30 or 60 days before last day the tenant should be sending its exercise notice. Another key aspect is that if the lease doesn’t end because neither party realized (or cared) that the date for exercise of the extension option had come and gone, the landlord should get the same period of time to find a replacement tenant as would have been the case if there were no requirement for a “reminder” notice from the landlord. To say that differently, if there was a 9 month notice requirement to extend the term, then the tenant would have to stay for 9 months after it gets the landlord’s “reminder.” If no “reminder is sent and the tenant didn’t timely notify its landlord that it was not going to exercise its extension option, it would be bound by the lease until 9 months after it then notifies the landlord that it wasn’t going to exercise the lease option. That way, a landlord would be allowing the lease term to continue running even though its tenant did not timely send an extension notice, but the landlord can cut the lease term off after 9 months just by sending a reminder notice to its tenant. [Read more…]
“I can’t help the way I feel; Things you do don’t seem so real; Tell me what you got in mind; Cause we’re runnin’ out of time; … .” Were Birmingham, England’s Fine Young Cannibals thinking of the lease and mortgage negotiation process? Yes, today’s posting is a rant. Short, but a rant nonetheless.
Don’t con a con man. If you are going to tell us why you won’t agree to negotiate something, please don’t make up a story like: “The devil made me do it” or “we never do that” or “our insurance people won’t let us” or “Dodd Frank says “no” or [fill in your own war story]. Of course, it’s perfectly fine to do so if it really is true and you can explain “why” instead of “because.” We’re all professionals and there is always the risk that we actually know about insurance or banking regulations. And, if we don’t, it is professional courtesy to teach each other about what is true and what isn’t true. [Read more…]