Feature

Do Government COVID Business Closure Orders Frustrate the Purpose of a Commercial Lease?

February 18, 2021    
In addition to their express terms, leases are governed by so-called common law rules that apply regardless of what the agreement actually says. One of these rules is a normally obscure and arcane doctrine known as “frustration of purpose,” which applies when performing lease duties is...
Drafting Tips

Limit Financial Risk When Granting Tenants an Operating Expense Cap

February 18, 2021    
Death and taxes aren’t the only certainties in life. So are rises in the costs of operating commercial property. That’s why landlords generally require tenants to pay their share of operating expenses. And while most tenants are willing to go along with this arrangement, some might...
Brokers’ Buzz

Make Clients Who Promise You a Commission Put It in Writing

February 18, 2021    
SITUATION Brokers line up a company that may be willing to make an offer on a commercial building owned by a previous client. You make this work and I’ll pay you a commission, the owner promises.
Owner Wins

Eviction Moratorium Doesn't Get Guarantor of Defaulting Tenant Off the Hook

February 18, 2021    
What Happened: Like so many tenants affected by COVID-19, Saks Fifth Avenue stopped paying rent at its flagship New York City store. The landlord sued Saks’ parent company, the lease guarantor, for $2.7 million in unpaid rent. If these were normal times, we’d be liable for the tenant...
Owner Wins

Tenant Waived Its Right to Arbitrate by Starting Lawsuit Against Landlord

February 18, 2021    
What Happened: If there are any disputes under this lease, we’ll try to resolve them via mediation. If that doesn’t work, we’ll go to binding arbitration. Those were the essential terms of a commercial lease between a landlord and gas station owner. Sure enough, a dispute arose...
Owner Loses

Shopping Center Must Pay $20K Damages for Violating Tenant’s Noncompete

February 18, 2021    
What Happened: A lease between a shopping center and hair salon banned the landlord from renting to a competing business. The landlord then acquired an adjacent, nearly identical building sharing the same parking lot located only 50 yards away and leased part of it to another hair salon for 10...
Feature

Structure Rent Repayment Plans to Take Advantage of New Bankruptcy ‘Preference’ Rules

January 22, 2021    
They say that no good deed goes unpunished. And if you’ve cut tenants a break on their rent during the COVID-19 crisis, you may have learned the truth of this maxim the hard way. This is especially so if the tenant later declared for bankruptcy. Thanks to the so-called rule of preference, you...
Plugging Loopholes

Require Tenant Notice of Default to Avoid Surprise Claims in Court

January 22, 2021    
Litigation is a big hassle, and when you resort to it you want to be sure you collect as much as possible from tenants who have left the space and are no longer paying rent. But your lease may have a loophole that defaulting tenants can rely on to get a court to reduce or even eliminate their debt.
Brokers’ Buzz

Are You Entitled to Commissions on Renewals that Occur After a Client Sells the Property?

January 22, 2021    
SITUATION The owner of commercial property comprised of two buildings with an adjoining lobby hires a brokerage firm to find a tenant for the space. The broker lines up a tenant. The lease runs five years and requires the “Owner” to pay the broker’s commission for the initial...
Owner Wins

COVID Shutdown Orders Don't Excuse Tenant's Failure to Pay Rent

January 22, 2021    
What Happened: Stop me if you’ve heard this one before: A gym that had to shut down temporarily under the governor’s COVID-19 emergency orders stopped paying rent in March. The landlord couldn’t evict because of the state-wide moratorium on commercial evictions. But it could still...