Recently, a 7- year old asked us a couple of questions. The first was: “How old will you have to be to drive a self-driving car?” The second was: “Will you need a driver’s license.” Our immediate, gut thought was that one won’t really “drive” such a car. You’d be a passenger. We’re not thinking about transitional vehicles; we’re thinking about fully-functional ones without driver controls. Then, upon reflection, all of this taking place before we uttered a response, we “knew” that states will set a “driving” age and require a license. Even after we get to control-less vehicles, those requirements, already in place, will exist for at least many years. [Read more…]
Zero-Based Thinking And Our Leases
November 17, 2019 By 2 Comments
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Don’t Believe What I Told You Clauses
November 10, 2019 By Leave a Comment
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Here’s a story with a few different lessons. One aspect of it won’t be of great utility to our readers, so we’ll get it out of the way right now. The tenant in this story appeared to sign a lease without counsel and without fully reading it. We don’t think that aspect casts any shade on the lessons we’ll be covering, but keep the tenant’s approach in mind as you read the rest of today’s blog posting.
The owner of a successful chain of quick-service, ethnic restaurants developed a new concept – a mall restaurant that would sell gourmet hot dogs. W.C. Fields might have called those “Gourmet Tube Steaks,” but that’s for another industry’s blogs. He honed in on a large mall, one that only had three remaining spaces in what appeared to be its food court (though the court never explicitly identified it as such). One of the existing tenants in that food court was a well-known, national, premium hamburger quick-service restaurant. No, it wasn’t the one with the golden arches. Although that hamburger restaurant sold hot dogs, they were only a sideline. So, this was of no concern to the owner’s gourmet hot dog plans. [Read more…]
You Can’t Be A Rogue Tenant If You Haven’t Gone Rogue (Yet)
November 3, 2019 By Leave a Comment
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Imagine you leased a large space at a shopping center for your sports bar and restaurant. In that lease, you negotiated for the right to be the only “sports themed restaurant/bar larger than 5,000 square feet” at the shopping center. About four years later, a new, 7,000 square foot tenant signs a lease “for the purposes of operating [] indoor golf simulators, to include the sale of golf-related apparel, a ‘fast casual’ restaurant, and a bar.” You might be a little on edge until you see that the new tenant’s lease included just what you had bargained for. It included that this golf-related tenant “may not, among other restrictions, use its premises for ‘a sports themed restaurant/bar larger than 5,000 square feet.’”
So far, so good. [Read more…]
Maybe A Certificate Of Insurance Is Actually Worth Something
October 27, 2019 By 1 Comment
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By now, almost everyone knows that an Acord Certificate of Insurance isn’t worth the paper it is printed on. [Click HERE if you need to see why they think so.] Why, however, “almost”? Who doesn’t know that? Well, that would be the Supreme Court of Washington. A little while ago, the Ninth Circuit Court of Appeals (the federal one) wasn’t sure about Washington state law, so it “certified” that question to the State of Washington’s highest court. Certifying such a question is when a federal court poses a question of pure law to a state’s highest level court, asking it: “what is your state’s law.” [Read more…]
Exculpation Lost On Assignment?
October 20, 2019 By 3 Comments
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We’ve written about “exculpatory” clauses before. The on-line version of Black’s Law Dictionary explains such clauses as follows: “An agreed-to condition (1) preventing blame or liability on one party due to the improper behavior of the other party; (2) preventing liability on one party due to not meeting all of the contractual performance expectations.”
In past blog postings, we’ve pronounced such clauses as overwhelmingly common in leases and almost always included to protect landlord-parties. We’ve suggested tenant-oriented versions. And, we’ve suggested tenant-protective modifications to this ubiquitous landlord-tilted lease provision. If interested, click HERE to read our thoughts.
We thought we had shot our load (an expression more acceptable than its more unsavory version, one that originated with early rifles) – until about a month ago when we saw a decision out of a California Court of Appeals, one that can be seen by clicking: HERE. The facts may be unusual, but the lesson is unsettling. Ruminations may not agree with the outcome, but denial, in this case, seems to be a big river in Egypt and not an effective legal strategy. [Read more…]
Cross A State Line And Co-Tenancy Failure Remedies Can Become Valid/Invalid
October 13, 2019 By 2 Comments
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In early 2015, we characterized a California court’s decision in a co-tenancy clause case as: “[A] California appellate court has found a typical lease provision to be an unenforceable penalty.” There, a tenant’s lease gave it the right to take a rent reduction and, after a period of time (if the landlord did not replace the lost co-tenant), it could terminate the lease. The California court allowed the tenant’s lease termination but made the tenant pay full rent during what was supposed to be the reduced rent period. Basically, it agreed with the landlord by holding that the substantial loss from the lower rent constituted an unenforceable penalty. For those interested in our description of that case and implied criticism as well, click HERE to step back to February 2015. [Read more…]
We, The Real Estate Professionals, Are Fighting The Last War(s)
October 6, 2019 By 4 Comments
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We’re thinking of renaming the Ruminations blog: Incoherencies. Not really, but today’s non-technical posting would sure support such a name change. [We also rejected a change to Ramblings, but only because that would give fuel to all of those who have tried to pin that moniker on us.] Here we go. Fortunately for readers, today’s blog posting will be short (for Ruminations).
The Times They Are A Changin’ – by Robert Zimmerman – has these lyrics:
Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won’t come again [Read more…]
For A New Landlord/Tenant, Does History Override An Unambiguous Lease Provision?
September 29, 2019 By 6 Comments
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We think this comes up much too often, and, it is often about rent, more often about additional rent, and sometimes it is about a non-monetary issue. What is “this”? “This” is about when a lease says one thing and the parties, over a long period of time, do another. We bring this up today because we just read a June 6, 2019 decision by the District of Columbia Court of Appeals.
A long-term air rights lease called for rent to change every five years beginning on the 10th anniversary of the “Lease Commencement Date.” The lease provided that the new rent [that’s what the court wrote, but we all know what it meant to say as that the amount of the “rent increase“] would be the current rent:
multiplied by twenty-five percent of a fraction, “the numerator of which is the CPI at the date of adjustment and [ ] the denominator of which is the CPI at the immediately preceding date of adjustment[:]”
By the tenth grade we were taught to convert that text to the following formula: [Read more…]
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