The Right To Use A Property (Itself) Might, Itself, Be “Tangible Property” (Read On)

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Today’s blog posting will be a slight deviation from our mission to cover real property law and real property law-related issues. We don’t think so. We think its conclusion could be relevant outside of a pure insurance context. Even if some conclude otherwise, certainly today’s’ Ruminating will be of interest to a subset of readers, those who think they know a thing or two about insurance coverage, but would like to test whether what they know is correct. To those readers who are uninterested in how the sausage of insurance law is made, we concede that today’s posting looks like it belongs in an insurance law blog. Though that argument could be made, it hasn’t deterred us because we think the subject is interesting.

Generally, a Commercial General Liability (CGL) Insurance policy will not cover purely economic losses. But, a California court in October of 2018 decided that “generally” does not mean always. [Read more…]

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You don’t have a tenant; you have a guest. Tenants pay rent; guests raid your refrigerator

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If your days are spent on behalf of a landlord with (internally or externally) professionally managed properties, then think of a topic you’d like to read about and search for it through Ruminations’ back library of over 400 blog postings. If, however, you have a relationship (even in a mirror) with the owner of a property or two, read on.

Too many times over too many years, our phone has rung with this question: “I have a tenant who is now five months behind, what should I do?” Self-help, even where “lawful,” is illusory. The risk of “doing it wrong” is pretty great and the damages a tenant can rightly claim aren’t pretty. So, we never advise “lock ‘em out.” We get pretty uncomfortable when asked, “Can I cut off the water or the electricity?” If your answer would be “Yes,” stop reading now.

Before we give advice, our reply is: “Have you spoken to your tenant? Is this a case of ‘won’t pay’ or is it ‘can’t pay’?” Far too often, what we hear back is: “No, I haven’t.” In such cases, our advice begins with: “Talk to your tenant.” [Read more…]

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Primary And Noncontributory – What’s The Scoop?

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Last week we wrote about a lease seemingly written by an inexperienced draftsperson. Though our point was to highlight the danger of inexperience, the court-reported situation we described also dealt with a missing insurance concept, that of calling (or not calling) for “primary” coverage. As a result, we got a few inquiries about the meaning or implication of that insurance term” and also about its sibling term, “non-contributory,” such as in: “The required coverage must be “primary and non-contributory.” So, here’s the scoop.

“Primary(ness)” (as does “noncontributory”) has to do with the priority of payment and only involves a situation where one party, named as an additional insured on the other’s liability insurance policy, also has its own insurance. When one of those two insurance policies is “primary,” and the other is not, the one that is primary will pay out until its policy limit is exhausted. At that point, if more needs to be paid, the other policy will cover the “excess.” [As to “noncontributory, we’ll get to it.] [Read more…]

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Experience Matters: Words Have Meanings (And An Insurance Pointer)

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Last week, we wrote about the need for competence when it comes to crafting deal documents such as a lease. Among the over 400 Ruminations prior blog postings are more than a dozen dealing with insurance. This week, we get to combine the two subjects thanks to a December 5, 2018 unpublished ruling from a New Jersey appeals court resolving an insurance dispute. The facts are mundane, but provide a roadmap for us today.

A tenant’s employee “injured himself using a freight elevator inside the leased premises.” He sued the landlord for negligence. [The workers compensation law barred him from suing his employer, the tenant.] Relying on the lease’s indemnification provision, the landlord claimed back against the tenant. It also demanded that the tenant’s insurer honor the landlord’s status as an additional insured under the tenant’s liability policy. As will be seen, the appellate court made the landlord unhappy. To understand why we’ll start with the lease’s indemnification clause. It read as follows: [Read more…]

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Don’t Know How To Do It? Then, Don’t!

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Some concepts are so simple that we never think that we’d have to point them out. But, today, one of those concepts occurred to us, and we’d like to share it with our readers. Here it is:

If you are going to craft documents, be they leases, purchase agreements or ‘whatever,’ you should know what you are doing.

Experience can be a good teacher, if your experience is good. Bad experiences could be a good teacher as well if you learn (quickly and correctly) and especially if they were someone else’s bad experiences.

Today’s blog posting was triggered by a nearly year-old Maryland court decision. The particular problem pointed out by the court, however, is something we’ve seen played out more than several times over the years. In this version, it involved a right and option provision amended into an existing lease. The relevant text read as follows: [Read more…]

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How Humpty Dumpty Interprets The Words We Use

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New York State has a law, New York General Business Law Section 518. It deals with how a merchant may post a pricing sign when there are two prices for the same goods – one if paying with cash, and one when paying with a credit (debit) card. This law raised a First Amendment issue, one that worked its way up to the United States Supreme Court and back to New York State courts. So, why will it be discussed on a real property blog site? It is because Ruminations is fascinated, some might say obsessed, with how a literal reading of text doesn’t always turn out to be its applicable meaning. So, it doesn’t matter whether the issue comes up in a contract or a law. Courts don’t have two sets of rules. Yes, some rules may not apply when looking at one category or the other, such as the use of “legislative history” when looking at a law. But, the analogous rule for interpreting words in an agreement is the parties’ “course of conduct” or “negotiation history.” In every case, the goal is the same: find the intent behind the text. [Read more…]

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Time And Deals – Of Mice And Men – Shake A Leg

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Today’s blog posting will reflect that not much thought has gone into writing it. That’s because we realized that it wasn’t going to get measurably better if we picked through it, questioning every phrase, discussing each element with friends and family, and then, after hearing everyone’s “free” advice,” starting all over again. You see, we’ve seen too many others do that with letters of intent (aka: deal sheets).

A lot has been written about whether a letter of intent should be detailed or just cover economic points. Ruminations has added to that body of literature. So, we won’t repeat what we’ve written. That can be seen by clicking: HERE or HERE. A lot has been written about whether (or how) a letter of intent can become an enforceable agreement. Ruminations has added to that body of literature. So, we won’t repeat what we’ve written. That can be seen by clicking: HERE or HERE. [Read more…]

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Negotiating Exclusive Use Clauses (With Sample)

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It is the rare retail project that is unencumbered by exclusive use rights granted by a landlord to one or more tenants.  While that may not have been as true in the distant past, this is now the “rule of the game.”  What is more, this concept has begun to spill over into the office leasing environment.

Large space tenants have the bargaining power to demand protection against competition within the project.  Conceptually, such protection is not unreasonable.  Think about it.  A large (often specialty) retailer draws customers to its store by dint of its reputation and expensive advertising.  Uncurbed, competing businesses would locate “next door” and draw business away just as a parasite would feed on a host.  In the office context, there are tenants who don’t want employees and invitees of competing businesses to be present in the lobbies, elevators, and lunchrooms. [Read more…]

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