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Did You Get My Letter?

May 14, 2017 By 3 Comments
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We’ve always wondered about an aspect of giving “notice,” but never having faced the particular issue, never went beyond “wondering.” Then, last week, we came across a Massachusetts Appellate Court’s decision touching on the issue. Ruminations can’t say that the outcome was very satisfying. So, we thought we’d toss it out for readers to think about. [That doesn’t mean we won’t share some of our observations, just that we don’t really have a conclusion (yet).]

Here’s the setup. A lease had a self-extension provision. Its term would roll over, a year at a time, unless either the landlord or tenant gave a “don’t do it again” notice. The particular provision read exactly as follows: [Read more…]

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Filed Under: Buying and Selling Properties, Retail Leases, Retail Real Estate Law Tagged With: , , , , , , , ,

To Recognize Or Not To Recognize? That Is The Question (Part 1)

September 27, 2015 By Leave a Comment
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One important exit strategy for a large space tenant seeking to shed itself of leased space is to have the option of assigning its lease or of subletting all or part of its premises. Generally, a tenant who no longer needs its space will prefer assignment if it can be simultaneously relieved of its lease obligations or if the prospective assignee is adjudged to be rock solid. Otherwise, subletting is preferred because the departing tenant, stuck with continuing contingent liability, can retain control of its space. However, to get rid of the old tenant as an intermediary between it and the landlord, an incoming tenant would prefer to take an assignment of the existing tenant’s leasehold interest. Sometimes, such as when the incoming tenant’s rent is substantially lower than the rent payable under the lease, a lease assignment just won’t work. Thus, where assignment of the lease is not workable or where less than all of the leased space is to be transferred, subleasing is the preferred choice. [Read more…]

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Filed Under: Retail Leases, Retail Real Estate Law Tagged With: , , , , , , , , , ,

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

October 12, 2014 By Leave a Comment
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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…]

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Filed Under: Financing Properties, Retail Leases, Retail Real Estate Law Tagged With: , , , , , , , , , , , , ,

What Kind Of Help To A Tenant Is Self-Help? Part 1.

September 28, 2014 By 2 Comments
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Here a mantra often heard by tenants all of their lives: “Make sure you get self-help rights. Make sure you get self-help rights.” It’s not a bad theme, but is it a cure-all? No, it’s not, and what it doesn’t cure depends on the relationship between the leased premises and the entire property. More about that in a little while. First, we’re going to list the kinds of landlord obligations that tenant might want to fulfill if the landlord doesn’t: [Read more…]

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Filed Under: Financing Properties, Retail Leases, Retail Real Estate Law Tagged With: , , , , , , , , , , , , ,

This Is A (Leasing, Sale, Loan) Deal. Why Have You “Gone Missing”?

July 6, 2014 By 8 Comments
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If you don’t like screeds, stop right now and we’ll see you next week after the extended July 4 holiday. Otherwise, tread lightly as you read on.

Doing a lease, a loan or a sale (and things like that) shouldn’t be like doing a divorce; it should be like doing an adoption. These are just business deals; just “money.” No one is or should be besmirching anyone’s reputation, seeking revenge or taking children away. And, even if that were the case, the negotiators are not the angry parties. Presumably, they are professionals. [Read more…]

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Filed Under: Buying and Selling Properties, Financing Properties, Retail Leases, Retail Real Estate Law Tagged With: , , , , , , , , ,

Landlords Rejoice – Your Tenant Is Borrowing Money

January 5, 2014 By 1 Comment
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Everyone accepts that property owners borrow money for their businesses. Very few properties are unencumbered by a mortgage. Other than in a very, very limited number of situations, tenants readily, perhaps automatically, accept that their lease will be subordinate to at least the lien of a mortgage. If a tenant can be insulated from the bad effects of a lender taking over a property or from the fallout of a foreclosure, it will or should be somewhat indifferent to having a lender or a new owner step in when its then-landlord can’t financially support the property any longer. Yes, it is messy, but think [Read more…]

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Filed Under: Financing Properties, Retail Leases, Retail Real Estate Law Tagged With: , , , , , , , , , , , , ,

Who Says A Landlord Should Restore After A Fire?

December 30, 2012 By Leave a Comment
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In our last two postings, we Ruminated about some of the issues involved in negotiating a lease’s damage and destruction provisions. If you missed those postings, start HERE and then continue HERE. Today, we’re going to Ruminate about whether and when a landlord should or will repair or restore its tenant’s premises or any other part of the property for that matter.

First we’ll fall back on the same questions we ask when someone isn’t paying what they owe. Is it that they can’t or that they won’t? That’s an important part of the analysis, because if “they can’t,” then learn the tune of “Dixie,” because that’s what you’ll be whistling. If you don’t know the tune, click HERE. You see, if the landlord just plain doesn’t have the money, you can’t even collect a damage judgment. And, given that most landlords are single purpose, single asset (the property in question) entities, if the property has burned to the ground, there ain’t nothing. Fortunately, this “pure” you “can’t get blood from a stone” landlord isn’t as common as you might think. You’d need a situation where a great deal of the property (and thus the landlord’s equity) was destroyed and there are no insurance proceeds or financially qualified tortfeasors to “chip in.” [Read more…]

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Filed Under: Buying and Selling Properties, Financing Properties, Retail Leases, Retail Real Estate Law Tagged With: , , , , , , , , , , , , ,

Screaming Louder As An Effective Negotiation Technique

July 15, 2012 By 3 Comments
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Here’s a respite from the last few postings. Instead of talking law stuff, we’re going to talk philosophy stuff. There are no experts here, only opinions. And, if history is a guide to the future, lots of them.

Also, this isn’t going to be a very focused posting. That might be because we’re going to try to steer clear of any substantive negotiation strategy but, in the end, but you can’t isolate style from substance. Perhaps instead of writing “substance,” we should be writing: “results.” [Read more…]

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Filed Under: Buying and Selling Properties, Financing Properties, Retail Leases, Retail Real Estate Law Tagged With: , , , , ,
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