Revisiting Inquiry Notice
A recent Illinois Appellate Court decision should lead to increased underwriting and due diligence inquiries by purchasers (and title insurers) of shopping center outparcels (that is smaller parcels at the center's perimeter that the shopping center owner intends to sell or lease for high-traffic uses) and may redefine appropriate inquiry notice throughout the retail industry. In <i>Murray's Discount Auto Stores, Inc. v. USRP Texas, L.P. and First American Bank</i>, Case No. 1-02-3434, the Appellate Court of Illinois, First Judicial District, held that the purchaser of a shopping center outparcel had knowledge of facts sufficient to put it on inquiry notice as to the existence of a no-build restriction contained in an unrecorded lease at adjacent shopping center property. In so doing, the appellate court sent a loud and clear message that shopping center easement rights and restrictions will be exalted at the expense of buyers who fail to take additional due diligence inquires that may be warranted under the circumstances.
In the Spotlight: New Bankruptcy Law Is Not All Good for Landlords
On April 20, 2005, President Bush signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which significantly changed the U.S. Bankruptcy Code. While various aspects of the new law give landlords greater rights in tenant bankruptcies, the law is not all good for landlords. The benefits of the new law for commercial landlords have been written about extensively, including an analysis of the new provisions setting definitive deadlines for a tenant to assume or reject a lease under the Bankruptcy Code. What has not been highlighted is that if a commercial tenant files a Chapter 7 bankruptcy case, a landlord's space could be tied up for 120 days or more, instead of 60 days or more under the old law. (This article does not address the special rules and protections for landlords of residential properties and is devoted to a discussion of the provisions regarding commercial properties.)
Exclusive Use Provisions: Practical Considerations for Landlord's Counsel
Today, most large tenants and many small tenants require that their core business be protected in a power or community shopping center by obtaining an agreement from the landlord that grants the tenant the exclusive right to sell the items considered by that tenant to be its core business. This 'exclusive' is considered sacrosanct by most retailers and, in most circumstances, will need to be agreed to by a landlord in order to consummate a lease with that tenant.
Vertical and Horizontal Transportation: When Is Convenience a Bad Thing?
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. The first part of this article discussed accessibility and visibility. The conclusion addresses relocation or closure of the transportation, and changing the means of transportation. Sample provisions are provided.
In the Spotlight: 'Da Insurance Code'
Let's be honest. How many of us really read the insurance section of a lease? Now let's be really, really honest: Who understands what that section means?
Issues Related to Turnover of Leased Premises at Expiration of Lease Term
When landlords and tenants are engaged in the negotiation and drafting of a lease, all too often, their attention is focused on those matters that are the first to occur. As a result, too little attention is paid to the issues surrounding the return of the premises when the lease term expires. Obviously, the business terms of the transaction such as rent, operating costs, and construction allowances all must be identified before a deal can be reached. Furthermore, those matters that have a direct impact on the tenant's occupancy and use of the premises are of clear importance to the parties from an operational standpoint. However, when the landlord and tenant fail to give the same level of consideration to the expiration of the lease term that is given to the commencement of the term, problems can arise.
Clarifying the Force Majeure Clause in a Commercial Lease
<i>A&FP</i> articles in March and April discussed how various 'boilerplate' clauses in a commercial lease may one-sidedly favor the landlord or tenant. The present article emphasizes the need to ensure that the force majeure clause in particular protects vital interests in the event of a major catastrophe. Whether your firm is a tenant or landlord, you'll want to take a close look, first at this article and then at your lease.
