Cyber Rentals
May 30, 2006
The Internet has profoundly changed the way real-estate rental transactions are executed, mostly for the better. Besides putting significant amounts of rental information into the hands of potential tenants and allowing virtual tours of available rental properties, the Internet allows prospective renters and landlords to submit rental applications and negotiate contracts online. Properly executed, an Internet real-estate rental application may save time and money for the potential tenant and landlord. Improperly executed, such an application may result in legal difficulties, including unenforceable contracts and negligence claims.
The Leasing Hotline
May 30, 2006
Highlights of the latest commercial leasing cases from around the country.
Vertical and Horizontal Transportation: When Is Convenience a Bad Thing?
May 30, 2006
To the typical tenant, being located near or adjacent to vertical and horizontal transportation, which may include elevators, escalators, stairways, people movers, and similar transportation, would be a beneficial situation due to the customer traffic that such devices provide. However, several issues or potential issues arise when addressing the presence of vertical and horizontal transportation within the common areas of an enclosed regional shopping center. In particular, the following issues should be negotiated: accessibility and visibility; the right to relocate or close such transportation; and the right to substitute various means of vertical and horizontal transportation systems. This two-part article addresses these issues and provides sample model clauses for vertical and horizontal transportation.
Criteria for Financeability
May 30, 2006
Among the many real estate assets that may be financed are ground or net leases. Despite many changes in the area of real estate finance over the past number of years, the legal criteria for determining financeability of a tenant's leasehold estate remain constant. Nevertheless, it is useful for the real estate practitioner to periodically take inventory of the standards. Certainty of leasehold financeability is essential, not only to any ground lessee or tenant that wants to finance the cost of constructing its leasehold improvements, but also to any tenant that decides to finance a portfolio of leasehold properties or whose corporate lender requires a collateral assignment of the tenant's interest in its leasehold estates as part of the security for a broader, corporate financing facility. The following sets forth fundamental issues to be considered in determining the financeability of a significant lease.
Racial Profiling: Lessons Retailers and Shopping Malls Should Learn from the Law Enforcement Experience
May 30, 2006
The law enforcement community was unprepared for the onslaught of allegations of racial profiling because it never anticipated it would become an issue with massive legal and administrative consequences. Because the law enforcement community was generally unprepared, the result included costly litigation and onerous settlements, as well as a decrease in public confidence. Many of these consequences may have been avoided if the law enforcement community had initially recognized the issue and then prepared to address it.
Protecting Against the Possibility of Catastrophic Events: Careful Consideration of Force Majeure Clauses in Commercial Leases
May 30, 2006
When commercial landlords and tenants negotiate commercial lease agreements, the normal focus of their efforts is the essential conditions of the tenancy ' rent amount, lease term, option periods, and the like. Often overlooked, however, are those provisions generally considered 'standard boilerplate.' <i>Force majeure</i> clauses, in particular, are frequently viewed as miscellaneous paragraphs not worthy of lengthy consideration or discussion. Unfortunately, the pitfalls of a failure to carefully negotiate the force majeure provision of a commercial lease are often realized when a true catastrophic event occurs. In such situations, the tenant may be least able to withstand any additional hardship and needs the protection that a well-drafted force majeure provision can afford. At the same time, owners of commercial real estate that have suffered through the recent catastrophic and tragic events such as the terrorist attacks of 9/11 and hurricanes Katrina and Rita unquestionably have learned all too well that the force majeure clauses of their leases may be the only means of ensuring invaluable protections if or when a catastrophic event does occur.
Post-Petition Enforcement
May 30, 2006
Generally speaking, after a bankruptcy filing, executory contracts are not enforceable against a debtor that has not yet assumed the contract. <i>N.L.R.B. v. Bildisco and Bildisco</i>, 465 U.S. 513, 531 (1984). However, the reverse is not true. During the pre-assumption period, the non-debtor party to the contract is presumed to be obligated to perform in accordance with a contract.
