I Surrender! Here’s Your Property Back: As-Is. Sue Me

Print

We are no fan of a particular type of “surrender” clause commonly found in leases, the “style” that calls for a tenant to “leave the property in as good condition as when it moved in, save normal wear and tear.” These clauses come in a variety of flavors, none of which Ruminations will offer today. In 2014, we shared some thoughts on this same topic in a posting that can be seen by clicking: HERE. We’ve also said (too) much about “wear and tear.” For those Ruminations of ours, search the blog site for (what else?) “wear and tear.” For the most part, our earlier writings have focused on the downside to tenants of this type of lease clause. Today, we’ll introduce a court decision that illustrates a giant shortcoming of the “same or better” condition requirement, one that should make landlords leery. Even readers who take a different approach to the condition of the leased property when its tenant departs will be interested in what the same court had to say about a property’s “move-in” condition and the implication for provisions dealing with the “move-out” condition. [Read more…]

Print

Personal Or General Misfortunes

Print

We’ve stolen our title from an article (or possibly it is a blog piece) dealing with the same concept but in a completely different field of endeavor. It wasn’t even about anything objective. But, its title and subject matter got us thinking about just what its author was discussing: that is “who should bear the risk?” We wrote about this a long time ago and, at the time, thought we had written a definitive piece on the subject. Now, we know we had not. Neither will be today’s posting. [For those intent on visiting the past, here’s a link to our 2013 rambling: LINK.]

Who deserves to lose when uncontrollable events present such an opportunity? We think few would argue that a tenant whose business goes south at all or most of its locations shouldn’t blame itself and should not blame any particular landlord. Similarly, if the neighborhood turns for the worst, and rental values fall, individual tenants are blameless when it comes to the landlord’s investment loss. But those examples aren’t entirely correct. [Read more…]

Print

Three Gems (Or So We Think)

Print

We’ve been doing Ruminations since 2011 and yet this is the first time we’ve deliberately done a multi-topic blog posting. Generally, when we choose a topic (400+ thus far) we dig in and treat(?) our readers to several pages of our ramblings. That approach has precluded our covering simple or easily contained topics, ones undeserving of deep drilling down. So, today, for the first time (but, perhaps not the last), we present a little of this and a little of that.

Overnight Delivery. In New York, service of lawsuit papers upon an attorney in a pending matter may be accomplished in a number of ways, including: [Read more…]

Print

Primary And Noncontributory – What’s The Scoop?

Print

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…]

Print

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

Print

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…]

Print

Don’t Know How To Do It? Then, Don’t!

Print

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…]

Print

How Humpty Dumpty Interprets The Words We Use

Print

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…]

Print

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

Print

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…]

Print