Attend Oxford University And Avoid Ambiguous Leases, Mortgages, And Other Agreements

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We just couldn’t pass up on this one even though newspapers across the country have brought it to the attention of the general public. We think we have a reader-relevant take on it, so our planned posting for this week will have to wait.

One of our the English language’s punctuation marks is highly educated – the Oxford comma. Ruminations uses the Oxford comma. Maybe you should as well. What is it? What does this 12th century city in central southern England, the City of Dreaming Spires, know about this particular punctuation mark? [Should we take a short pause, comma-like, to mention that there is a university there, one with 38 colleges? Not today. Oops, too late.]

The “Oxford comma” is the one placed before the “and” at the end of a serial list: “We use the Oxford comma when we list items such as A, B, and C.” [It’s known as the Oxford comma because it was traditionally used by printers, readers, and editors at Oxford University Press. To be clear, we aren’t talking about a list that includes the “printers, readers and editors at Oxford University.”] [Read more…]

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What Does Difluoromonochloromethane Mean To Landlords And Tenants?

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Today, Ruminations will seem to be discussing difluoromonochloromethane. Though it might seem that way, we’re actually using it as a proxy for a more general “suggestion.” But, that will need to wait.

Difluoromonochloromethane has been a remarkably useful chemical compound. If you know about it at all, you probably know it as “R-22.” If you do, then you can skip right over the next sentence. R-22 is a hydrochlorofluorocarbon-based refrigerant used in about half of this country’s commercial air conditioning systems. If has some other, less common, uses but when it comes to HVAC, it is “king.” Down the road, however, it will be abdicating its office. The process began a number of years ago, but the closer we get to 2020, the clearer this will be.

This refrigerant is an ozone-depleting substance. Regardless of any reader’s position about climate change or global warming, no one thinks that destroying atmospheric ozone is a good thing. So, 30 years ago, following a series of meetings in Montreal, lots of countries, the United States included, signed an international treaty. To implement that treaty, those countries, including the United States, embarked on separate programs to end the use of ozone-depleting substances.

Here’s a short translation of what the United States did with respect to R-22 starting in 1993. Manufacture or import of equipment using R-22 refrigerant after 2009 was banned. Production or import of R-22 is banned after 2019. [By the way, by 2030, the entire class of chemical compounds known as hydrochlorofluorocarbons will no longer be manufactured in, or imported to, the United States. [Read more…]

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I’m Frustrated; Let’s Call It A Day And Part Company.

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In 1902, a tenant rented premises for the purpose of watching the upcoming two-day coronation procession of Edward VII. The premises were promised to be a great place from which to view what was expected to be a gala event. A one-third deposit was posted upon signing and the balance was to be paid at least two days before the scheduled coronation. There was a written agreement covering the two-day rental, but it made no reference to Edwin VII’s big day.

King Henry became ill and the procession (parade and all) was cancelled. The tenant didn’t pay the rest of the rent. The landlord sued for the balance of the rent and, in response, the tenant countersued for return of its deposit.

In 1861, an entertainment impresario contracted for use of a music hall, intending to present “a variety of extravagant entertainments” in that performance space. A week before the first performance date, the venue was destroyed by fire. The impresario sued for return of its money on the grounds that the hall owner failed to deliver on its promise to provide the space. The contract did not allocate the risk of such a fire as between the hall owner and the impresario. [It did end with, “G-d’s will permitting.” [Read more…]

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What Can Humpty Dumpty Recover If His Wall Wasn’t Finished On Time?

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Today, we return to the topic of “damages.” Our context will be “waiving” them. That way, we won’t feel as if we are duplicating postings of long ago such as the ones you can review by clicking: HERE or HERE or HERE.

The core “damages” one can expect to collect are designed to give the injured party “the benefit of its bargain.” That’s not the same as being made “whole.” Those core damages, ones that probably should never be “waived” are designed to give a party the money necessary to get what it “bought” in the first place. So, if the buyer was promised a car with a spare tire and the trunk turned out to be empty, the measure of its damages would be the cost of a spare tire. If a tenant was supposed to get trash removal “included” and the full container is surrounded by overflowing trash bags, the tenant is entitled to enough money to get the trash hauled away. If a builder contracted to put up a building and didn’t finish it, the customer would be entitled to the quantum of money that would pay to finish the building.

But, what about the cost of going out to buy that tire? What about the lost business from customers who ran from the store because of the “stink”? What about the cost to rent alternate space because the building was not completed by the contracted-for time? [Read more…]

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Whose Deal Is It Anyway?

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Two stubborn mature men arguing with each other isolated on white background

Rules are made to be broken even if no one knows there was even a rule. In this case, it is Ruminations violating its own rule against two consecutive screech-blog postings. Over the last 300+ postings, we’ve “salted” Ruminations with observations about our own bad habits and those we’ve seen in our generally great real estate community. We’ve tried to space them about a month apart. Last week, we wrote about an all too common way that a minority, but a disturbing minority, of our colleagues try to put the “other” negotiator down. This week we address another one of our “bugs.” That’s a rule-breaker.

To make matters worse for us, we are breaking another one of our rules – the one that has kept us from singling out one subset of our community – this week, the lawyer subset (of which this writer is a very proud member). Our distress isn’t limited to this subset. Certainly we of that persuasion hold no monopoly on the tendency to be complained-about today. Yet, we in that profession certainly suffer more frequently from this affliction than do members of any other subset of the real estate community.

Alright already, what is it? It is thinking that we are the business people who are actually making the deal – forgetting that it is our client’s (or principal’s) deal. How do we do this? We do it by arguing pure business terms as if the money to be paid or received will be coming out of our own pockets. [Read more…]

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(Un)Successful Negotiating: How To Lose Friends And Turn Off Colleagues

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Negotiation and civility are not and should not be mutually exclusive. And, yet, even some of those who agree with that haven’t internalized that principle. Whenever our own thinking brings us back to this pet peeve, we think of a remarkable colleague, one no longer with us. Brilliant and direct, he held strongly developed views and expressed them in a blunt way. Yet, he was never acerbic. Put differently, he had a remarkable ability: to be able to disagree without being disagreeable.

Does anyone really think that telling someone on the other side of a deal: “No one has ever asked for that before, you are being ridiculous,” will bring about the desired result? To our thinking, there are two possibilities. One is that the “ridiculous” proponent of the unprecedented bargaining request plain simply didn’t understand what she or he was asking for. The other possibility, the far more likely one, is that the proponent’s experience is quite different. She or he has heard the request before and likely has made the request, sometimes or even many times, with a successful result. Whichever is the case, directly or impliedly insulting your across-the-table (telephone, email) colleague isn’t likely to be a convincing argument. Basically, it is an ad hominem attack and reveals more about the speaker than the target. [Read more…]

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Just Because The Agreement Allows It Doesn’t Mean It Is Allowed

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First, Ruminations is not expanding its coverage to all that would be considered “contract law.” It’s just that leases, mortgages, and all of the other documents we encounter on a daily basis are just a subset  of the broader category of contracts, ones dealing with real property. Second, although we mostly write about memorializing agreements, from time to time we bring up the topic of how people act once their agreements are executed. Today is such a day.

So, today, Ruminations will be focusing on some post-contract behavior we read about in a January 20, 2017 decision from the Supreme Court of Delaware. For readers who don’t already know this, here’s a valuable piece of information. The Delaware Supreme Court is held in extremely high regard by courts of other states – it is “persuasive.” And, when it overrules the very highly regarded Court of Chancery of the State of Delaware, ears should perk up. [Read more…]

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How Much Insurance Coverage Does The Tenant Have For Damage To Its Leased Premises?

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There are general categories of “insurance.” One is “life and health.” The one we care about is property and casualty,” the industry shorthand for which is: “P&C.” For those of us in this business, the “P” means commercial property insurance. That makes the relevant insurance “commercial general property” insurance. Let’s use that name.

For our purposes, the “C” mainly means “liability” insurance, and that makes the relevant insurance “commercial general liability” coverage. That’s what “CGL” stands for. The “C” in this case stands for “Commercial,” not for any of those other words some of our colleagues insist on using despite your efforts to correct their error.

Most insureds, especially large insureds, will carry both a CGL policy and a commercial property insurance policy. In almost all, but not all, cases, each policy form will consist of the ones promulgated by the Insurance Services Office, Inc. (ISO) modified by multiple endorsement forms (also by the ISO), most of which limit (reduce) the promised coverage.

A meaningful number of small businesses, especially in industries with unique needs, will have “package” policies that combine the “P” and “C” in the same policy. For example, auto repair businesses are exposed to business-related risks associated with taking custody of property owned by others (i.e., property under their care, custody, and control). In addition, garage owners drive customer’s (expensive) cars and are expected to look to their own insurance, and not their customers’ insurance, in the case of an accident. “Package” or “Program” policies are not written on ISO forms. Each insurance company writes its own form, sometimes paralleling ISO language, but there is no guaranty of that. If you are at a small law firm, take a look to see if you have a combined policy. It might be labeled a “Businessowners Policy” or a “BOP.” [Read more…]

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