Retail Real Estate Law

More Boring Insurance Stuff

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Yes, today’s posting will be boring and perhaps a little dry. And, to add insult to injury, nothing in it will be earth-shattering. But, knowledge is power. And, even if you don’t want to be powerful, you certainly don’t want to be drafting documents and making business agreements involving insurance without knowing what is available and what is possible. Do you? We didn’t think so.

Yes, today we write about insurance, and whenever we do so, we repeat this caveat: “Find and rely on a genuine insurance expert. This stuff is not intuitive.” Our primary goal is to let our followers know enough about insurance to realize that they and we don’t know enough. A secondary goal is to get those of us who include insurance requirements in our documents to know that last year’s (or even last week’s) text may no longer be what we would like to have written. Lastly, for those who buy insurance, today’s blog posting might induce you to call and say hello to your insurance broker or other advisor. [Read more…]

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Can You Tell The Difference Between The Bagel And the Hole?

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Yes, this will be a complaint; one we think is shared by many readers. Have you ever worked on a deal with someone who, as we say in New York, confuses the hole for the bagel itself? [Years and years ago, we might have said, “donut,” but it seems that you can now buy the “hole” by itself. Think about that. Are we really buying a “hole”?]

Ruminations offers two examples of the kind of people accused of this approach to deal making. The first is the person who had a “bad” experience in a deal and is driven, compelled, obsessed, preoccupied, and engrossed to make sure that if the agreement being discussed covers anything at all, it absolutely must have language that will make sure the disturbing experienced is never experienced again. As we see it, however, the problem is that the “driving” experience either came out of the facts in the earlier situation or the perceived “drafting shortfall” in the earlier “nightmare” agreement and was really a proxy for whatever went on. And, all too often, the prior situation was for a different kind of deal – basically, the deal on the table and the “nightmare” deal have little, if anything, in common. Yes, in the prior deal, had the parties been required to wear fur mittens, they wouldn’t have gotten frostbite. But, in this “put up a building on the equator” deal, requiring fur mittens actually interferes with getting the project completed. [Read more…]

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To A Hammer Everything Looks Like A Nail

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Knowing what you don’t know is a good thing. A practical application of that statement comes when you are trying to figure out how a particular jurisdiction will treat a particular agreement such as a lease. There are some legal principles that suffuse state law throughout the United States. The law of damages is NOT one of those principles. Yes, the generality of “damages” is pretty much the same all over, but the details are not. Here’s an example from a just-decided Colorado case from its Supreme Court.

The question that court considered was whether a seller could really make the choice of remedies provided-for in the following contract clause: [Read more…]

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Can You Back Out Of A Deal If The Agreement Is Still Unsigned?

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Anyone who hasn’t asked this question or been asked this question just hasn’t been around long enough – “Now that the final agreement has been prepared, are we obligated to sign it and go forward?” There’s no need to scroll down to the bottom for an answer. We’ll put it right here, up front – “It depends.” “It depends” doesn’t mean: “No.”

There’s a companion question that gets asked – “What if we, up front, say that we can back out at any time before signing, for any reason or no reason at all”? There’s no need to scroll down to the bottom for an answer. We’ll put it right here, up front – “It depends.” “It depends” doesn’t mean: “No.”

Today’s blog posting is mostly the following story, one that illuminates the questions we’ve begun with.

As part of an on-line, sealed bid auction sale of non-performing loans, prospective bidders were presented with a required form of asset purchase agreement.  The successful bidder would be required to sign that agreement. Interested buyers were invited to present “indicative” bids. Based on those indicative bids, the seller would select acceptable candidate-buyers and those parties could perform pre-bid due diligence for the offered loans. [Read more…]

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Rely On Your Own Insurance And Stop Arguing About It (Again)

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It doesn’t matter how much you want to continue riding. Beating a dead horse isn’t going to get you anywhere. Or, so we have been told. Nonetheless, we are going to say, for the umpteenth time, landlords and tenants should carry AND RELY UPON their own insurance policies.

But, why should I? After all, can’t I just be happy knowing that I am an “additional insured” on the other’s commercial liability policy? [Just to make the Ruminations position clear: NO.] Before we elaborate on “here’s why,” we’ll digress. [Casablanca: “I am shocked – shocked – to find out” that Ruminations will digress.] Find us the person that couldn’t have spent more time with friends and family if she or he hadn’t been on the phone arguing with someone over the “additional insured” language in a lease, mortgage or other agreement. [Read more…]

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Exclusive Use Clauses And Antitrust Concerns

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It’s been a thousand or more leases since Ruminations did any serious thinking about the intersection of exclusive use restrictions, radius clauses, and their respective lawfulness. This isn’t a current topic of discussion in leasing circles, though it certainly was 40 to 50 years ago. Yes, there is comfort in knowing that, with the passage of time, we aren’t seeing the “anti-trust” or “unfair methods of competition” armies marching into the shopping center arena. That is, possibly, until now.

Readers can research the law on their own. It isn’t worth wasting electrons on hyper-technical legal background. Suffice it to write that there is a Federal Trade Commission Act barring “unfair methods of competition in commerce … .” The lessening of competition is a danger also addressed in the Robinson-Patman Act, the Sherman Act, and the Clayton Antitrust Act. Further, some states have their own anti-competition or antitrust laws. [Read more…]

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Isn’t It Simple To Send A Notice? Apparently Not

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In the six years of our Ruminating in this forum, we’ve written a lot about notices, renewal options, and waivers. We just came across an otherwise insignificant case (other than to the parties themselves) illustrating some of the points we’ve tried to make over the course of this blog’s life.

Our story involves an unremarkable retail lease and a single, also unremarkable, lease amendment extending the original lease term for 20 years and granting the tenant a 5- year extension option thereafter. To exercise the extension option, the tenant was required to give 180 days’ prior irrevocable, written notice. The lease amendment did not specify what the notice had to say and did not give any “rules” for how a written notice needed to be given. Beyond those two substantive items, the lease amendment said that all other terms and conditions of the lease remained as originally set forth in the lease. [Read more…]

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Circumventing Lease Transfer (Assignment – Subletting) Restrictions And Other Ploys (Part 3)

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Today’s blog posting may not make sense to those who haven’t read our previous two postings. In the first part of this three part series, we presented some basic assignment and subletting concepts, legal and practical. That can be seen by clicking: HERE. Last week we continued that presentation, but moved into what we titled: “The Troubles I Have Seen – General Assignment / Subletting Issues.” That posting ended with a list of shortcomings  commonly plaguing many assignment/subletting lease provisions. It can be seen by clicking: HERE.

Today, we continue by listing more practical issues faced by all of us when trying to restrict lease transfers (what most landlords seek to do) or when trying to facilitate lease transfers (what most tenants seek to achieve). Even if you’ve chosen not to look at the prior postings, we guaranty that today’s posting will make you want to do so. So, to that end, we begin with: [Read more…]

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