Parallel Construction, Consequential Damages, And Use Of A Dictionary

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Questions about damages and remedies are not simple to answer and, often, the answers are less than fully satisfying. The overriding framework is that business people don’t really focus on these “leave it to the lawyers” issues until a problem rears its head. Unlike many lease and other agreement issues that are worked out between cooperating parties, when one starts to look at a document or at the law to see “what are my rights, what can I do, how can I be made whole,” the relationship has already broken down. That’s when each side starts counting commas and looking for all of the “notwithstandings.”

Today, we’re going to look at an actual case, one decided at the end of October by a California appellate court. It can be seen by clicking HERE.

It involves the concept of “consequential damages, “exclusive remedies,” and “rent and other charges.” And, as will come as no surprise to regular readers, it teaches us something about using the right words. Oh, yes, it also describes a very familiar process, that process being where lawyers are hired to try to find a way to argue that the words in a lease or other agreement support a conclusion contrary what any objective observer would see as the plain intention of the parties. In the course of that process, the dispute we’ll be describing became the subject of four, count them, four separate appellate proceedings. [Read more…]

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Ruminations Goes Bowling – Scores A 300!

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300 is a pretty good score for a single bowling game. It is a score of perfection. While the same can’t be said about reaching our 300th Ruminations blog posting today, perfection not even being on our wish list, we’re pretty pleased at having reached this benchmark. Some call it ranting; we call it Ruminating, and that’s what we’ve done weekly 300 times. Why?

We love doing it because of our readers, over 2500 each week. We love doing it because of our subscribers, about 1300 of you. We love doing it because of the discussions it generates by way of comments directly to this blog site, on LinkedIn, and by various side channels. We who facilitate real estate deals, and that’s almost every one of you, are a community. We don’t need to see each other eye-to-eye, though (admittedly) we’re always thrilled to meet a reader in person, in order to know one another. We all care enough about doing better work today than we did yesterday, to share our ideas. Lurker or active correspondent – it doesn’t matter, we are all Ruminators – we all think and care about what we are doing, about what we sign our names to. [Read more…]

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You’ve Got To Know What Words Mean – Was Arbitration Mandatory?

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Arbitration (and other alternate dispute resolution methods) have their place in agreements such as leases. Another possible way to say that, and one that brings out a bit of nuance, is that arbitration is a specialized tool, not a Swiss Army knife.

Even its strongest advocates, those who would like to sidestep litigation entirely, recognize that there are things that courts can do and arbitrators can’t. One prime example is to evict a tenant for non-payment of rent. In most jurisdictions courts do that well and do it quickly. They have a direct relationship with the officials empowered to throw tenants out. Arbitrators would need to get judicial enforcement of what would be the equivalent of a warrant of removal. Courts have a summary disposition procedure for eviction cases. As a practical matter, the arbitration process doesn’t and won’t. [Read more…]

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When Does A Holdover (“Sufferance”) Tenancy Begin?

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The most popular Ruminations blog posting, by far, is the one dealing with holdover tenancies [It can be seen by clicking HERE.] We write, “holdover tenancies” only because that is how people speak about tenants who remain in the leased premises after their right to stay there has ended. Yes, they are some kind of “tenant,” but Ruminations sees them as trespassers, someone who is on another’s land without permission.

Today, we are going to work with a 2014 unpublished decision from the Appellate Division of the New Jersey Supreme Court. It can be seen by clicking HERE. The case covers a couple of interesting points beyond that of “holdover,” and we’ll try to discuss those as well. So, expect to read about oral leases and license agreements as well as about “holdover.” We’ll begin with this court’s comments about holdover tenancies, more accurately called “tenancies at sufferance.” Here they are: [Read more…]

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Why Can’t I “Go Dark” If The Lease Says I Can?

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Just because a lease doesn’t have a continuous operation provision doesn’t mean that the tenant, even an anchor tenant, can “go dark” by boarding-up the premises if it continues to pay rent. Especially if doing so harms the landlord without a proper benefit to the tenant. That’s a lesson we learned a long, long time ago and which was reinforced long ago in a New Jersey unpublished court ruling. We’re thinking of a 1998 unpublished decision in the case of Berardi v. Acme Markets, Inc. It doesn’t appear to be available on-line so, after you’ve read to the end [and gotten at least an 80 on the final exam (just kidding)], just email meislik@meislik.com for a copy.

OK, we’ve gotten you this far by making a pretty broad statement – too broad and too general, designed to capture your interest – but one that could be the case if the facts are right. The real outcome depends on an unwritten provision in almost every kind of agreement. What, unwritten? Yes, the “implied covenant of good faith and fair dealing.” We’ve Ruminated about that before, such as HERE. Nonetheless, please read on and see how that covenant can work. [Read more…]

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Beware Of Boilerplate: Sword Or Shield?

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There is no shortage of commentary and reference material covering the drafting and negotiating of a real property lease. As a result, it is tempting to try to cover more ground or to go further than others have gone when analyzing a lease’s provisions. Ruminations will make a deliberate effort not to succumb to that temptation.

The scope of today’s posting is to look at four “boilerplate” clauses in a typical lease. If we get a positive response, we may cover a few more clauses over time.

What, really, is “boilerplate”? The word’s common meaning is a provision that is ordinary, common, and by implication generally acceptable. In reality, there are very few, if any, such clauses in a form lease. They may be ordinary and common, but they aren’t necessarily generally acceptable – especially to a tenant. No bias is intended today. Nonetheless, it is impossible to be entirely balanced as between a landlord’s concerns and a tenant’s concerns. After all, pre-printed forms are designed for sale to landlords, not tenants, and most leases begin on landlord-generated forms. [Read more…]

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When It Comes To An Agreement, What Is “Market”?

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Here’s yet another Ruminations blog posting without a conclusion. We call that Ruminating. Almost all of our readers operate within a contractarian society. Yes, our agreements are governed by a set of laws, but not like a lot of other places. There is a saying that in the United States, “everything which is not prohibited is allowed,” while in Germany, “everything which is not allowed is prohibited.” Freedom of contract is great, but how should it work in practice?

We’ve observed that, for the most part, agreements, such as leases and purchase contracts, verbose and comprehensive (and those two are not inextricably entwined) as they most often are, really recite the reasonable expectations of the parties. And, those reasonable expectations are based on what each party thinks is “market” or “fair.” Yes, each side sees industry wide or local customs and practices through a biased (and wishful) set of eyes, but there are remarkably few places where their expectations are truly divergent. Ruminations feels comfortable in writing that because market expectations also include business terms known to be “open for discussion, ones that could go either way.” [Read more…]

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You Can’t Get An ALTA/ACSM Land Title Survey Anymore

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Today, we write about surveys, but in a pretty narrow way. We assume readers know enough about surveys for our posting to make sense and be useful – useful as in “it’s time to update our lease, mortgage, and other forms.” If you are still calling for an “ALTA/ACSM Land Title Survey,” start calling for an “ATLA/NSPS Land Survey.” In 2012, the American Congress on Surveying and Mapping (ACSM) merged into the National Society of Professional Surveyors (NSPS). Earlier this year, in February to be more specific, the survey standards were changed to reflect that change. So, if any reader wants to be “hip,” start practicing “ALTA/NSPS.”

That wasn’t the only change to the 2011 survey standards; they became the 2016 standards. Thus, we’ll all want to refer to the “2016 ATLA/NSPS” ones.

What are the other changes, trivial and a little less trivial? Here are some highlights. [Read more…]

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