No One Is At Fault: It’s Time To Rethink Our Leases And Loan Documents

Print A few weeks ago when COVID-19 kidnapped our blog postings, we wrote about recognizing the differences between individual catastrophes and community catastrophes. As further evidence that Ruminations has little if any influence on our industry, it seems to us that we stand almost alone in the way we are analyzing the current situation. While newspapers, other media, law firms, industry gurus, and general analysis sources are predicting the future from a global perspective – i.e., what will the “new normal” look like; will this coronavirus rear its head again, over and over; will it morph and be with us for a long time to come – the industry blog postings and law firm memorandums we are reading (by the hundreds) seem to focus on weaponization. Yes, how can one of the three: landlords, lenders, and tenants, defend or protect themselves against the others?

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Valium To Order Articles about “force majeure” are an example. Those that look backward analyze how clauses written without any thought of a pandemic can be retroactively reinterpreted to provide rent relief. Those that look forward seem to be encouraging that tenants (in their leases) and landlords (in their loans) insist on a provision giving relief either for a pandemic or, in essence, for any situation not anticipated at the time the binding documents are executed. We’ve seen “advice” from respected sources suggesting that, in situations such as what we are all facing today, payment modifications or workouts be treated just like “we always did,” beginning with a review of the payor’s financial statements, business plans, financeability, etc. [Read more…] Print

Maybe A Certificate Of Insurance Is Actually Worth Something

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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…] Print

Insurance Proceeds: Use Them Or Lose Them

Print When it comes to some property insurance proceeds, the tag line is: “Use it or lose it.” Most agreements such as leases and mortgages, even poorly written ones, call for one party or the other (or both) to carry property insurance for “replacement cost.” [By the way, “full replacement cost” isn’t one barleycorn larger than plain, old “replacement cost.” A full quart of milk takes up no more space than a lowly quart of milk. And, it isn’t “replacement value,” it is “replacement cost.”] But, “replacement cost” doesn’t mean that the insurer goes out and writes a check for what is determined to be the damaged property’s replacement cost, even if the property is totally destroyed. The insured only gets paid for the cost of what is actually repaired. Note that we’ve just written “repaired,” not “replaced,” even though the coverage is called “replacement” cost. That’s because “replacement cost” is a limit, not the amount that is going to be written on the check. [Read more…]

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Jack Of All Trades, Master Of None – Avoiding Hubris


Several Ruminations blog posts over the years have posited that many of us, this writer included, don’t listen very well to what the person on the other end of the deal is actually saying. We already know what we think we ought to know and, certainly, that person, a/k/a “our adversary,” is only seeking an advantage over us. We don’t even play a purely intellectual game by taking the other side’s “position” in our head and rolling it over (and over). We’ve even seen this, more than a handful of times, when that other person is really trying to help us avoid a mistake. An appropriate word for this might be “hubris.” That means excessive pride or excessive self-confidence. According to one source, in Greek tragedy it means “excessive pride toward or defiance of the gods, leading to nemesis.” That same source lists these synonyms: “arrogance, conceit, conceitedness, haughtiness, pride, vanity, self-importance, self-conceit, pomposity, superciliousness, feeling of superiority.” While we are at it, that still same source defines “nemesis” as: “the inescapable agent of someone’s or something’s downfall.” [Read more…] Print

It Might Be Negligence To Leave Out The Word Negligence (Unless It Isn’t)


Are there “magic words” or are there not? Once again, we feel compelled to warn readers that “we need to know what we are doing.” A lot of people in this “business” of ours cross over jurisdictional lines whether rightly or not. There is a lot of material out there about the ethics of doing so. That’s a reasonable concern to have, but there is a far less discussed, but more serious, problem. It is called malpractice. That term is not limited to attorneys. It isn’t even limited to professionals. It is hard enough to know the law in a single jurisdiction. Know the “law” in every jurisdiction (e.g., state) is, frankly speaking, impossible.

If we are going to “practice” in the real estate world, we need to practice well, not malpractice. “Mal” is a “combing form,” one that is added to words. It comes from the French “mal,” and that came from the Latin “male” which meant “badly.” [We sure hope the word is pronounced differently than is the gender.] The bottom line, however, is that “malpractice” is practicing in a faulty or improper or inadequate manner. No reader of this blog wants to come within a million miles of anything “mal” in her or his practice. So, we need to know that we don’t know the law everyplace. One example is how various jurisdictions view liability waivers. Today, we write only about one aspect of that question – whether to effectively be released from one’s own negligence, a waiver must expressly say that “negligence” is being waived or whether waiving “all” claims for damage really means “all,” including those claims arising out of negligence. [Read more…]


The Right To Use A Property (Itself) Might, Itself, Be “Tangible Property” (Read On)


Today’s blog posting will be a slight deviation from our mission to cover real property law and real property law-related issues. We don’t think so. We think its conclusion could be relevant outside of a pure insurance context. Even if some conclude otherwise, certainly today’s’ Ruminating will be of interest to a subset of readers, those who think they know a thing or two about insurance coverage, but would like to test whether what they know is correct. To those readers who are uninterested in how the sausage of insurance law is made, we concede that today’s posting looks like it belongs in an insurance law blog. Though that argument could be made, it hasn’t deterred us because we think the subject is interesting.

Buy Cheap Xanax Pills Generally, a Commercial General Liability (CGL) Insurance policy will not cover purely economic losses. But, a California court in October of 2018 decided that “generally” does not mean always. [Read more…] Print

Primary And Noncontributory – What’s The Scoop?


Last week we wrote about a lease seemingly written by an inexperienced draftsperson. Though our point was to highlight the danger of inexperience, the court-reported situation we described also dealt with a missing insurance concept, that of calling (or not calling) for “primary” coverage. As a result, we got a few inquiries about the meaning or implication of that insurance term” and also about its sibling term, “non-contributory,” such as in: “The required coverage must be “primary and non-contributory.” So, here’s the scoop. “Primary(ness)” (as does “noncontributory”) has to do with the priority of payment and only involves a situation where one party, named as an additional insured on the other’s liability insurance policy, also has its own insurance. When one of those two insurance policies is “primary,” and the other is not, the one that is primary will pay out until its policy limit is exhausted. At that point, if more needs to be paid, the other policy will cover the “excess.” [As to “noncontributory, we’ll get to it.] [Read more…] Print

Experience Matters: Words Have Meanings (And An Insurance Pointer)


Buy Xanax Next Day Delivery Uk Last week, we wrote about the need for competence when it comes to crafting deal documents such as a lease. Among the over 400 Ruminations prior blog postings are more than a dozen dealing with insurance. This week, we get to combine the two subjects thanks to a December 5, 2018 unpublished ruling from a New Jersey appeals court resolving an insurance dispute. The facts are mundane, but provide a roadmap for us today. A tenant’s employee “injured himself using a freight elevator inside the leased premises.” He sued the landlord for negligence. [The workers compensation law barred him from suing his employer, the tenant.] Relying on the lease’s indemnification provision, the landlord claimed back against the tenant. It also demanded that the tenant’s insurer honor the landlord’s status as an additional insured under the tenant’s liability policy. As will be seen, the appellate court made the landlord unhappy. To understand why we’ll start with the lease’s indemnification clause. It read as follows: [Read more…] Print