A common question we get (or see) has to do with very, very late billings for taxes or common area charges. Though one would think that a landlord would be anxious to send timely, periodic bills, for some reason, some don’t. If any reader can explain the advantage a landlord gets by sending a bill for three years of charges in one fell swoop, please do so. Otherwise, we’ll continue to think it’s crazy. If nothing else, tenants and leases turn over. Go chase a tenant whose store or even whose business closed years earlier. [Read more…]
Parking Clauses, Parking Clauses, Everywhere, But Not An Answer To Be Found
July 21, 2019 By 1 Comment
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Seek and ye shall find isn’t always true. An example will be today’s blog posting. We’ll raise some issues but offer no solutions. Today is audience participation day. If so inclined to publically offer some thoughts, the comment feature at the bottom will be your ultimate destination.
We’ve been in a number of parking lots lately – schools, churches, public, airports, shopping centers, and more. Many have been far emptier than we’re remembering and we’ve been seeing changes. We have been seeing the tell-tale logos of “Transportation Network Companies,” a/k/a Uber, Lyft, Taxify, etc. We’ve been doing the slaloms around motorized scooters from some of those providers and many others, mostly with four-letter names. A number of times already, we’ve expressed our sense that these and other non-owned transportation alternatives will reduce the need for shopping center parking. So, we’re not going to say those things again. If you are interested in those thoughts, use the Ruminations’ search feature. [Read more…]
PrintOperating, Managing, Policing, Insuring, Repairing, And Maintaining
April 14, 2019 By 5 Comments
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Most retail leases have a “CAM” provision and though they are formulated in a myriad of ways, a common element can be found in the way “common area maintenance” (CAM or Operating Expenses) is defined. The words used are seen so often that many eyes glaze right over them. They are so familiar that, long ago, we stopped thinking about them. This occurred to Ruminations as we read an unpublished February 19 decision from the Court of Appeals of Arizona (an “intermediate” appellate court).
Here’s what that court told us. A bunch of shopping center tenants, as a group, sued their common landlord over a Common Area Maintenance (CAM) billing for capital expenses. Exactly what is a capital expense? There are too many definitions used for a “capital expense,” and even the Internal Revenue Code doesn’t provide much help because its “definition,” if you can call it that, relies on some principles. Here is what those might be: [Read more…]
PrintOld And Cold – Audit Rights And Claim Cut-Offs
July 29, 2018 By 1 Comment
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Is there a time to let old things die? We are qualified to answer that question when it comes to matters emotional, but when it comes to “business,” Ruminations only has some thoughts. Today, we’ll discuss chasing people who owe money but, because money isn’t everything, we’ll start with a little digression intended to make a point.
How long should the government (that’s us, by the way) be permitted to chase a criminal? Many (but not all) states have laws that answer that question. Here’s New York’s answer:
6 years for felonies punishable by 8 or more years in prison
3 years for felonies punishable by less than 8 years in prison
No limit for murder or other capital offenses.
Three years for misdemeanors committed against children 13 and younger.
One year for other misdemeanors.
Though the time limit to file civil claims also varies by state and by the type of claim being made, they also butt up against time limits. Typically, general contract claims must be made within 6 years after the claim can first be made. Claims arising out of the sale of goods have a 4 year limit. Tort claims (and automobile accidents fall in that category) typically have a two or three year limit. Some defamation claims have an even shorter limit – only one year. Unsurprisingly, claims against government entities often have shorter time limits. After all, “Whoever has the gold makes the rules.” [Read more…]
PrintWho Fixes What At The Shopping Center? How Do You Know?
January 7, 2018 By 3 Comments
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A shopping center has a finite number of elements requiring maintenance, repair or replacement. Basically, in mathematical terms, it is a closed set. That means all possible points are within its boundaries. So, if you allocate responsibilities for certain parts of a shopping center to one party and then say that the other party has responsibility for everything else, you’ve covered every possibility. Given that the leased space is a sub-part of the entire shopping center, it is easier to list a tenant’s responsibilities than to list its landlord’s. That’s made even easier if you can say that the tenant is responsible for everything inside the leased space except for a short list of discrete items. Then, you can add a short list of items outside the leased space and the result will almost always be complete as to the tenant’s role. Everything else would be cast upon the landlord. [Read more…]
Health Care Is Like A Shopping Center (A Continuation)
June 4, 2017 By 1 Comment
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We’re not sure that last week’s blog posting was a satisfying one for more than a small part of the Ruminations audience. Long-term readers will know that we are not deterred by that. After all, for those that have not yet reviewed our page-end disclaimer, here it is, moved to the top:
Disclaimer: Ruminating and rambling can easily be confused. There are a lot of dictionary meanings for “ruminating.” Our favorite (today) is: “to turn a matter over and over in the mind.” That sounds a lot like “rambling.” For that reason, no one should mistake anything written on this blog as resembling legal advice, even when written by an attorney —not the original blog entries, and not any comments. This blog is intended to be a discussion board for concepts–some flaky, some not–that affect Retail Real Estate Law. Please join that discussion.
We think that understanding underlying principles, such as the issues involved in allocating operating expenses, makes for better deals, better documents, and better agreements. And, to the extent each party has bargaining power, the real driver of an agreement’s business terms, knowledge is power. [Read more…]
PrintShopping Centers Are Like Health Care
May 28, 2017 By Leave a Comment
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There may be a connection between our national health care (insurance) policy and our industries’ approach to back-charging for common area expenses (operating costs) and real estate taxes. Oh, come on – isn’t this a craven attempt on the part of Ruminations for topical relevance? Read on and judge for yourself.
Wikipedia provides as good an explanation of “community rating” as one will find anywhere. For its relatively short entry on the subject, click: HERE. For those who don’t want to leave the page, take a look at this:
Community rating is a concept usually associated with health insurance, which requires health insurance providers to offer health insurance policies within a given territory at the same price to all persons without medical underwriting, regardless of their health status. [Read more…]
PrintWhat Does Difluoromonochloromethane Mean To Landlords And Tenants?
March 5, 2017 By Leave a Comment
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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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