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...]
How To Waste Everyone’s Time And Money By Pretending That You Know What You Are Doing (As The Basis For A New Year’s Resolution)
It’s a shame that we’re all in holiday mode because some readers may have missed last week’s posting. If you are one of those readers, click HERE to see what it was all about. And, don’t miss the comments, especially the one from the owner of the business whose entry into the retail market was at the root of our posting. It reinforces the message that you may have the right to do something, but it doesn’t mean you also have the power to do it. [Read more...]
Today, we’re going to revisit a general topic we visited last June 30. Ironically, this was also just before a holiday week and was seen by about 25% fewer readers than in a normal week. Oh well – “If the spirit moves you, let me groove you.” That’s from “Let’s Get It On” by Marvin Gaye. What’s the topic? It’s Prohibited Uses.
The inspiration for today’s posting comes from something, Tanya Marsh, a good friend and a good Professor at Wake Forest University School of Law wrote and then sent to us. [Read more...]
Rent is such a simple thing. It is covered in every lease. Those who draft leases get told how much the rent will be and that’s it. After all, “rent is rent.” It’s just a number. So, why is Ruminations about to talk about rent? To find out, read on.
In olden times when leases were not much more than an exchange of money from a “tenant” to a property owner (landlord) for an interest in real property, i.e., for an estate of limited duration, things were much simpler, so to speak. In essence, a lease was a document of conveyance and the rent paid for the right to exclusive possession of the leased property for a stated term, much like the purchase price for a deed. [That’s all we are going to say, today, about the mix of conveyance theory with contract theory that underlies today’s leases.] [Read more...]
Everyone knows that “the rent has got to start sometime.” So, why do we see leases where that might not be true? In the most common such scenario, rent will begin “X” days after the tenant gets all of the final and unappealable permits it needs to adapt the leased space for its intended use. If a landlord were planning to use the rent money for an around-the-world vacation trip, what should its booking date be? [Read more...]
Why Your Exclusive Use Right Will Be Useless, And Even If It Isn’t, Why You Won’t Collect Damages For Its Breach
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...]
Why Courts Aren’t Real Keen About Enforcing Exclusive Use Rights Or Other Kinds Of Restrictive Covenants
It’s been a while since we Ruminated over exclusive use lease provisions, and a while since we’ve written: “Say what you mean; mean what you say.” In fact that was the subheading for a 2012 posting about this very same general topic: restrictive covenants / exclusive use rights. If you doubt us, click HERE.
We’ll start with a recent Ohio Court of Appeals case dealing with a Reciprocal Easement Agreement (or Declaration of Restrictions or something like that; we aren’t told which). The case is captioned Fettro v. Rombach Center, LLC, 2013-Ohio-2279 (OH Ct. App., Dist. 12, Jun. 3, 2013). If you click HERE, you can read the decision. [Read more...]
We came across a recent Texas Court of Appeals Memorandum Decision validating a “double rent” holdover lease provision. It held that the “doubling” was a contractually agreed-upon rent, and not an unenforceable penalty as the tenant had argued. If the light from this candle we’re using tonight holds up, we’ll return to that central holding of the case.
The nice thing about the court’s June 28, 2013 opinion in Khan v. Meknojiya, 03-11-00580-CV (Tex. Ct. App. 3rd Dist. 2013) [a copy of which can be seen by clicking HERE], is that the facts aren’t very explicit. Why, then, do we say “the nice thing”? That’s because it allows us to make them up. And, when we do so, you can’t say we’ve gotten them wrong because, by definition, they are right. Nonetheless, we’ll try to stick our own “story” inside what you’d see in the court’s opinion if you were to look at it. [Read more...]