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Leasing to Non-U.S. Tenants: Protecting Against Default and Ensuring Enforcement

August 10, 2016    
By Ellen Siegel, Esq. Special considerations need to be addressed when a prospective tenant is not a U.S. business or individual. These considerations are geared to ensuring that the tenant and the guarantor, if any, have sufficient assets within the U.S., and that all jurisdictional and choice-of-...
Resolving Disputes

ADR: Considerations in Drafting the Arbitration Clause

August 10, 2016    
Two of the most oft-cited reasons for seeking alternative dispute resolution (ADR)—specifically arbitration—as an alternative to litigation are the potential savings in time and costs to the parties, including the greater likelihood of final resolution due to the limited bases upon...
Drafting Tips

License v. Lease: When to Use a License Rather Than a Lease

August 10, 2016    
CRE owners should be aware of situations in which a license agreement may prove to be more beneficial than a leasehold interest. The key factors that distinguish a license from a lease are the ability to revoke the licensees’ use at will, and the degree of control that the property owner...
Drafting Tips

Rent Acceleration Clauses: Discount to Present Value

August 10, 2016    
Rent acceleration clauses in commercial real estate leases are often the subject of contentious negotiations between the parties, and increasingly, the subject of review by courts when enforcement is challenged by tenants and guarantors. Rent acceleration clauses protect the owner by providing it...
Feature

Modify Standard Form Lease to Fit Commercial Condo Tenant

July 25, 2016    
While the terms of commercial leases will vary to some degree depending on the owners, tenants, and types of businesses involved, most of the same items are on the agenda for negotiations. Renewal or expansion options, common area maintenance exclusions, use clauses, and assignment and subletting...
Drafting Tips

Specify That Tenant's Additional TIA Won't Be Abated

July 25, 2016    
In a strong tenants’ market, you might find yourself fighting for good tenants that help the synergy at your center or serve as a destination spot that will draw and keep foot traffic. You may be forced to offer incentives, like a tenant improvement allowance (TIA) that’s bigger than...
Plugging Loopholes

Don't Let Tenant Ambush You with Default Claims

July 25, 2016    
You might think that if you sue a tenant that has stopped paying rent and abandoned or been evicted from its space, it’s only fair that the tenant pays you what it owes in damages. If you’re surprised to find out that some tenants end up paying only a fraction or even none of the...
Q & A

Can Court 'Revive' Terminated Lease?

July 25, 2016    
Q: After I sent a notice of default to a tenant and asked it to cure the default under the terms we had agreed on in the lease, the tenant claimed it hadn’t defaulted. There have been protracted discussions over the course of about two months about whether the tenant’s actions are a...
Owner Wins

Material Changes to Lease Didn't Relieve Guarantors of Rent Liability

July 25, 2016    
Facts: Two guarantors agreed to be liable for rent payments under a lease for stationery store space. Shortly before the lease was to expire, the tenant and the owner of the shopping center where the store was located entered into an amendment, extending the lease term. The amendment provided that...
Feature

Negotiate Three Ways to Get Control over Tenant's Exclusive Use Right

June 17, 2016    
The right to be the only tenant in a shopping center or mall that sells a certain type of product or operates a certain type of business is highly valuable—and, therefore, very strategically negotiated. This right, which is given to the tenant in the exclusive use clause of its lease, can...