The Chickens Come Home To Roost – Pretext And Tenant Control Over Development

Print According to Lawrence Peter “Yogi” Berra (May 12, 1925 – September 22, 2015), late of Montclair, New Jersey, “You can observe a lot by just watching.” That’s how we get our “experience” – by watching what we ourselves have done and by what others have done. We can learn from those experiences, “ours” and “theirs.” That’s one reason we read court decisions. Doing so allows us to safely observe what others have done without getting burned, even when the situations covered by these decisions invoke another Yogiism: “It’s deja vu all over again.” We came across a late August court decision out of the U.S. District Court for the Northern District of Alabama. It involved a lease dispute at an enclosed mall, one emblematic of the history of such malls. At 300,000 square feet, it opened in 1970 with 32 inline tenants and two department stores as anchors. By 1982, one had disappeared and its parent company soon followed. The following year, a national retailer relocated its own department store from downtown to the now-vacant space. In the mid-1990s, plans were made to expand the mall, based in part on the addition of a third department store building. Some physical impediments delayed those plans and then the contemplated additional department store chain was acquired by yet another. This resulted in a further delay. But, the mall’s expansion opened in 2000, and the mall grew to 700,000 square feet of space. [Read more…]


What’s In A Name When It Comes To Sending An Extension Notice?

Print We just looked at a court decision about a lease renewal notice and can’t make up our mind what we think about the result or about the wisdom of the issue having been litigated in the first place. We’ll begin with the story and conclude with the “wisdom” part.

A national retail chain store had an important lease in a big city. The initial lease term was ending, but there was a 5- year extension term available upon the tenant’s sending of proper notice. It seems that the agreed-upon extension term rent was, in the aggregate, $3 million below what the then-market rent would have been. To most of us, that’s “big bucks.” In hindsight, a savvy landlord would regret making such a deal. Some might even be willing to spend some money to thwart or, let’s say, resist, a tenant’s efforts to exercise such an extension option. If, perhaps, there was only an 8-1/3% chance of doing so, would one spend $250,000? That’s 8-1/3% of $3 million. In the Appellate Court of Illinois decision (of August 26, 2019) we just read that is what happened. The landlord spent $125,000 (or so) to cover its successful tenant’s legal fees, and (presumably) a similar amount for its own fees (or, possibly less – we don’t really know). It lost. [Read more…] Print

What Is The Lifespan Of A Lease After The Stated Term Ends?

Print What are the rules between a tenant and its landlord after a lease expires? In today’s blog posting, we aren’t exactly thinking about a “holdover” tenancy. In the context of this question, we’ll leave that for another day. [For those who haven’t yet read what we wrote in our November 2012 posting: “Why So Much Confusion About Holdover Tenants?,” it can be seen by clicking here: HERE. For other Ruminations about holdover tenancies, you can click: HERE or HERE.] It is common to see a lease recite something like the following: “If the Tenant remains in possession after this lease ends, the continuing tenancy will be from month to month.” At least, that’s how the lease we learned about in a California appellate decision (of January 10, 2019) just read by us. [It, Smyth v. Berman, can be seen by clicking: HERE.]  On its face, it would seem that those quoted words are equivalent to a lease extension just as would be the case if the tenant had an extension (or, poorly named, renewal) option. Well, is it the same? [Read more…] Print

Is There A Limit To Waiving A Non-Waiver Clause?


When we first wrote about the loophole in non-waiver clauses that recognizes parties can orally agree to waive such clauses even one that explicitly say that there can be no oral waivers, we got some notes expressing incredulity. After the reality set in, the notes started asking whether there were any limits to this “loophole.” We at Ruminations didn’t know how to answer until we came across a May 12, 2017 decision from the Texas Supreme Court in a case where one of the parties has this name: Boo Nathanial Bradberry. The decision can be seen by clicking: HERE. It ruled there was a limit and its reasoning makes pretty good sense. [Read more…]


Who’s On First? Keeping Track Of Basic Facts

Print Please don’t ask for the central theme of today’s blog posting. We’ve done so already and came up empty-headed. The closest we’ve come is that we’re writing about how a stitch in time saves nine.

The genesis of today’s subject is a very simple case that reached a California appellate court. It probably isn’t worth looking at, but for those compelled to do so, the February 2, 2017 decision can be seen by clicking: HERE.] The court was confronted with a situation where, on its face, the signatory to an indemnification agreement was not authorized to sign the agreement on behalf of the indemnitor (the one who would have to pay). There was no indication that the document was signed with the intention of fooling anyone. It appears that the person signing the agreement was confused or ignorant as to “who” should have done the signing. We’ll explain. There were two limited liability companies. One was the sole manager of the second. We’ll call the first company, the parent, and the second, the child. The parent had a managing member. He was the kind of person who breathes, unlike, say, Citizens United. He could sign on behalf of the parent, but when signing for the child, the “proper” signatory would be “by parent, as sole member of child, by breathing person, as managing member of parent.” Get it? If not, then realize that the “person” who could sign for the child was the parent. But, because the parent was an entity who could not hold a pen, a “real” person needs to sign on behalf of the parent. [Read more…]


Out With The Old Perfectly Good Lease, In With …


Well, another holiday weekend has rolled around. When that happens, we try to stay away from technical or detailed topics and just Ruminate about things that trouble us. We try to throw out some easily digestible thoughts and await the bounce-back. Today’s posting meets those criteria, but after hacking out today’s blog posting, we were haunted by two old quotations. Both are almost certainly wrongly attributed to Samuel Clemens a/k/a Mark Twain. But, that doesn’t make them any less disturbing.

The first is: “What gets us into trouble is not what we don’t know. It’s what we know for sure that just ain’t so.” The other is: “When I was a boy of fourteen, my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished at how much he had learned in seven years.”

Buy Valium Manchester Guilty on both counts.

Here’s the puzzle, one that wasn’t a puzzle when we were younger. Isn’t ignorance beautiful? Imagine this situation. There’s a shopping center lease executed in 1976, 40 years ago, and it has run out of extension options (then probably called “renewal” options). The lease has worked well. In fact, over the 40 years, no one ever dragged it out to look anything up other than to see what had to be done to exercise one of those extension options. [Read more…]


Options: Two Wrong Ways To Write It Right


Weekly, Ruminations looks for a topic. Now, two short of 250 blog postings [who’d a thunk?], finding unique ones is a challenge. Don’t worry, we’ve got a few lined up. But, today, we’re returning to a central theme: the failure to write what you mean. This isn’t theoretical. It that regard, we respectfully disagree with the late, great Judge Benjamin N. Cardozo, in particular when he wrote:

Buy Xanax Cod Saturday Delivery The law has outgrown its primitive stage of formalism when the precise word was the sovereign talisman, and every slip was fatal. It takes a broader view to-day. A promise may be lacking, and yet the whole writing may be “instinct with an obligation,” imperfectly expressed. If that is so, there is a contract. [ Wood v. Lucy, Lady Duff-Gordon, 118 N.E. 214 (N.Y. 1917)]. [Read more…]


Lease Term Extensions (Renewals) – You Snooze; You Lose

Print We’ll begin with some controversial thoughts about a tenant’s right to renew its lease or, as we prefer, to extend the lease term. They are all grounded in the position that the right of a tenant to extend the term of its lease is not a gift from the landlord. It is bought and paid for, much as is any other right in the lease. It is part and parcel of the deal. “How much is the rent if I lease the space for five years and get the right to extend the lease term for another five years?”

Buy Valium Brand Online We’ve tread on some of this ground before. To see what is in the Buy Xanax 1Mg Online Ruminations archives, click HERE and HERE.

Let’s make it clear, Ruminations is neither a poll follower nor a flip-flopper. We still abide by the principle that the terms of a lease (or any other agreement for that matter) are the result of negotiation and that the outcome of such negotiation is heavily influenced by the relative bargaining powers of the parties. But, we also think that the marketplace has norms or starting points and (also) if you don’t ask, you don’t get. [Why some attribute this axiom to Stevie Wonder, we don’t know. But, we didn’t ask, so we didn’t get.] [Read more…]