Damages – Page 4 – Retail Real Estate Law Ruminations

What, Me Worry? “AS-IS,” Whyfor?

August 23, 2015 By Ira Meislik 3 Comments

When you come across a contract provision that shouts out “AS-IS,” do you have a complete understanding about what is involved or just a general one? For the most part, when you take something “AS-IS,” you are taking it without any warranty. That means the landlord or seller doesn’t have to “make it right” – the risk of something being wrong falls on YOU. Unless you find a sympathetic judge, it means you are taking the “whatever” with all faults – those you can see AND (even, maybe) those you couldn’t have seen.

Basically, “AS-IS” has to do with your expectations. If you buy a boxed radio from an electronics chain store at something close to a “real” selling price, you expect (and have the right to expect) that it will function as a radio should function. If you fish the same kind of radio from the bottom of the barrel at a flea market and pay “two bucks,” you get it “AS-IS” even if there was no sign to that effect on the barrel. [Read more…]

Filed Under: Buying and Selling Properties, Retail Leases, Retail Real Estate Law Tagged With: Agreements, Ambiguity, AS-IS, Contracts, Damages, Drafting, Landlords, leases, negotiation, retail real estate law, Tenants

Whose Rogue Is It Anyway, A Landlord’s Or Its Tenant’s?

March 8, 2015 By Ira Meislik 4 Comments

Last week and the week before, we wrote about some substantive aspects of exclusive use covenants – promises by a landlord to its tenant that only that tenant will be permitted to sell certain goods or services at the shopping center. Our goal was to point out some of the difficulties and challenges faced when writing rules as to what can and can’t be sold and the extent to which certain other tenants could be free, in some or all regards, of those crafted restrictions.

We received some direct comments and a number were posted to various other web sites, notably on those hosted by Linked In. We also received some private comments. Most focused on the remedies an aggrieved tenant might have against its landlord if the landlord’s covenant (promise) was broken. None (yet) addressed how, when, and with what success a “protected” tenant might directly act against a neighboring tenant alleged to sell those goods or services even though the neighboring tenant knows or should know of the restriction. We promise to discuss this within the next few months, but not now. We’re waiting for a friend’s law review article to be published so that we can point interested readers to a “real” legal analysis, not just this Ruminator’s ramblings. [Read more…]

Filed Under: Retail Leases, Retail Real Estate Law Tagged With: Agreements, Contracts, Damages, Drafting, Exclusive Use Rights, Landlords, leases, negotiation, retail real estate law, shopping centers, Tenants

Can A Tenant Enforce A Rent Abatement Penalty? Here, A Court Says: “No.”

February 1, 2015 By Ira Meislik 3 Comments

What would you think if Ruminations told you that it is perfectly fine in California for a tenant to terminate its lease if a co-tenancy condition isn’t met, but not to exercise a rent waiver, even if it hasn’t opened its store? Well, we’re telling you that based on our seeing a January 12 court decision from a California Court of Appeal. The case is Grand Prospect Partners, L.P. v. Ross Dress For Less, and the decision can be seen by clicking: HERE.

Uncharacteristically, we’re aiming for a “short one” today. [We’ve missed.] So, lawyers and law buffs should certainly take a look at the court’s opinion. It is rich with “real” legal analysis, though we think it is far short when it comes to the court’s understanding of commercial reality. What is more, the court’s analysis doesn’t seem to be limited to co-tenancy remedies; it could be equally applicable to agreed-upon remedies for violation of exclusive use rights or access violations.

The keystone to today’s blog posting, and to the court decision that led to it, is the legal concept of an “unreasonable penalty.” We’ve written about this before in the guise of what is known as a liquidated damage. Search Ruminations using “liquidated damage” as a search term. But, now, to the story. [Read more…]

What Kind Of Help To A Tenant Is Self-Help? Part 3 (Whew, The Finale)

October 12, 2014 By Ira Meislik Leave a Comment

Enough with the “self-help” already, but not before we address every reader’s favorite commodity – “money.” When a tenant does what a landlord is required to do, but didn’t (or a landlord does what the tenant should have done, but didn’t), the motive isn’t charity. Whatever was “self-helped” has to be at the expense of the non-performing party.

Just because repayment is expected and deserved, no one should be expected to write a blank check, even if that signatory brought about the situation itself. The work that was done should be necessary and the cost of doing it should be reasonable under the circumstances. That’s a two-part test that needs to “passed” before the non-performing party should be obligated to pay up. One the test taker (the self-help exercising party) gets a passing grade, the non-performing party should make its payment within a short period of time. The amount owed should be treated as if it were an “extension” of credit; and the time for payment should be based on reasonable administrative needs. Ten to twenty days should be appropriate in all but the most unusual of circumstances. [Read more…]

Filed Under: Financing Properties, Retail Leases, Retail Real Estate Law Tagged With: Agreements, Contracts, Damages, Drafting, indemnification, Landlords, leases, lenders, mortgages, negotiation, remedies, retail real estate law, SNDAs, Tenants

We Hold These Truths To Be Self-Evident, That All Rents Are Not Created Equal. What Does “Present Value” Mean?

September 14, 2014 By Ira Meislik 3 Comments

Everyone knows that a dollar received today is better than a dollar received a year from now. Many realize that it is advantageous to pay a dollar a year from now rather than pay it today. That’s the “time value of money.” It is also based on a pretty good, but not guaranteed, assumption that interest rates and inflation rates will be positive. Historically, that has been a good bet.

We’ve used the word “better” in the sense that most would understand, but “better” is actually in the eyes of the beholder. It is better for the recipient to get the dollar now, but that’s not the case for the payor. [Well, we’ve gotten that out of the way.]

So, which is better when it comes to paying or receiving monthly rent for a five year lease: (a) $12 per square foot of floor area throughout the term; or (b) $10 the first year, $11 the second year, $12 the third year, $13 the fourth year, and $14 the final year? After all, $12 per square foot is right in the middle, it is the average rent “figure” over the five year term. [Read more…]

Filed Under: Buying and Selling Properties, Financing Properties, Retail Leases, Retail Real Estate Law Tagged With: Agreements, Contracts, Damages, Drafting, Landlords, leases, lenders, mortgages, Present Value, retail real estate law, Tenants

A Million Dollar Lease Drafting Lesson

August 3, 2014 By Ira Meislik 8 Comments

An “Evergreen” contract is one that renews over and over. So does an “Evergreen” letter of credit. So does the topic that follows – how, if your documents are not written carefully, courts may do damage. And, perhaps “written” isn’t the real activity to be scrutinized and “thought-through” would be a better choice of words.

Today, we are going to look at a late April court decision from the U.S. District Court for the Southern District of New York: In re: The Great Atlantic & Pacific Tea Company, Inc. You can see it by clicking HERE.

This is about A&P’s bankruptcy and even without knowing the disputed issue, a very good guess is that the bankrupt estate will be enhanced by the court’s ruling. If that is a little cynical on the part of Ruminations, then so be it. While there are conflicting public policies involved in bankruptcy matters, one seems to loom over almost all others: “get more money into the pot to pay unsecured creditors.”

Read on; look at the decision itself; you decide. [Read more…]

Filed Under: Buying and Selling Properties, Financing Properties, Retail Leases, Retail Real Estate Law Tagged With: Agreements, Ambiguity, Contracts, Damages, Drafting, Landlords, leases, negotiation, Tenants

Why Your Exclusive Use Right Will Be Useless, And Even If It Isn’t, Why You Won’t Collect Damages For Its Breach

December 1, 2013 By Ira Meislik 2 Comments

Last week we started to tell you a story about a “supermarket” exclusive that we learned about when we read the U.S. District Court’s decision in the Maryland case of Redner’s Markets, Inc. v. Joppatowne G.P. Limited Partnership, Civil No. L-11-1864. If you want to see the Decision, click HERE.

The scenario is a simple one. A supermarket had a lease wherein “its landlord agreed not to lease any space at the [shopping center] or within a five mile radius thereof to be used as a food supermarket, butcher shop, seafood shop, or grocery store.” So, it got pretty annoyed when an “Amish farmer’s market” opened with seven stalls within a single enclosure. Though the farmer’s market was coordinated by a single individual, the stalls were separately owned and operated. You could buy a variety of grocery and supermarket items in the “market” because there were stalls named: “Dutch Delights, Dutch Pantry Fudge, Kreative Kitchen, Lapp’s Fresh Meats, King’s Cheese & Deli, Beiler’s BBQ, and Beiler’s Baked Goods.” If that didn’t satisfy your appetite, there were three other (unaffiliated) stalls outside the enclosure, one of which was “All Fresh Quality Seafood & Produce.” [Read more…]

Filed Under: Buying and Selling Properties, Retail Leases, Retail Real Estate Law Tagged With: Agreements, Contracts, Damages, Exclusive Use Rights, Landlords, leases, negotiation, retail real estate law, shopping centers, Tenants

What Is A Landlord’s Duty To Deliver Possession Of The Leased Space?

February 3, 2013 By Ira Meislik Leave a Comment

Interestingly, and probably not known by many, there are two very different possible legal obligations of a landlord to deliver the leased premises to its tenant. Some jurisdictions require delivery free of occupants and free of other persons entitled to possession of the same leased premises. Other jurisdictions only require that the landlord deliver the “right of possession” to a tenant, leaving it up to the tenant to get rid of any trespassers.

This doesn’t come up very often in commercial leases because almost all of those leases define what constitutes delivery of the leased premises. The smart leases require that the leased premises be delivered free and clear of all occupants and tenancies. Those leases that don’t say that or something like that should be corrected.

Consequently, the real “play” in lease negotiations over delivery issues is “by when,” and what happens, “if not.” [Read more…]

Filed Under: Buying and Selling Properties, Financing Properties, Retail Leases, Retail Real Estate Law Tagged With: Damages, Delivery, Drafting, indemnification, Landlords, leases, negotiation, Possession, remedies, retail real estate law, shopping centers, Tenants