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Matters that Require Careful Consideration When Structuring the Continuing Co-Tenancy

By D. Albert Daspin and James H. Marshall
August 18, 2003

Parts One and Two of this article described what a co-tenancy provision is and discussed the issues involved, for both the landlord and tenant, when drafting one. The conclusion will address the continuing co-tenancy.

The Continuing Co-Tenancy

The principal difference between the continuing co-tenancy and the opening co-tenancy is the period of time addressed by each. The opening co-tenancy clause is triggered when the opening co-tenancy conditions have not occurred on or before the date the tenant's rental obligations commence. The continuing co-tenancy clause, on the other hand, provides the tenant relief if one or more of the continuing co-tenants or a certain portion of the project goes dark after the tenant opens. Otherwise, the structure of the two clauses is substantially similar. The continuing co-tenants are either named or are to occupy a certain portion of the floor area at the project (floor area is the typical yardstick), and the tenant would be permitted to exercise similar remedies upon the occurrence of the continuing co-tenancy event, including terminating the lease after the expiration of a cure period. As a result of the timing differences between the two co-tenancies, two additional matters should be considered and warrant careful consideration in structuring the continuing co-tenancy.

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