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This article contains some of the lesser-known, creative clauses used to ensure either payment of rent and compliance, or a swift eviction of the commercial tenant. They are what the authors call "tools of the effective default clause."
An effective commercial lease will dictate the future relationship between landlord and tenant. The more clauses forcing the commercial tenant to comply with its obligations, the better chance the landlord will have, not only to achieve a successful relationship, but also to ensure that the rent is paid and the tenant behaves. Below are some of the lesser-known, creative clauses used to ensure either payment of rent and compliance, or a swift eviction of the commercial tenant. They are what we call “tools of the effective default clause.”
By Janice G. Inman
Bankruptcy is a fact of life in the United States. When it happens, the treatment of a lease as either residential or non-residential may be crucial to all parties -- landlords, tenants, subtenants and their counselors.
By Barry M. Klayman and Mark E. Felger
In a recent decision, Bankruptcy Judge Christopher S. Sontchi addressed the question of whether a Chapter 11 debtor, the tenant under a commercial lease, could exercise an option to renew the lease during the bankruptcy proceedings, even though the debtor was in default under the lease and the lease specified that it could not be renewed if defaults existed at the time the option was exercised.
By David B. Saxe and Danielle C. Lesser
Is This The End of the ‘Yellowstone’ Doctrine?
Recently, New York’s Appellate Division, Second Department, acknowledged that commercial landlords may employ a strategy that prevents tenants from exercising Yellowstone rights, which enjoin the landlord from terminating the lease or commencing a summary proceeding.
Slip-and-Fall Victim Cannot Recover from Landlord or Tenant