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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 Marisa L. Byram and Wheeler Frost
Assignment provisions in a commercial lease often boil down to the following seemingly simple, but more often than not complex, standard: that the lease may only be assigned or the premises subleased with the landlord’s consent, not to be unreasonably withheld. The following examples of case law illustrate how courts have construed this provision under various circumstances.
By David Kupetz and Asa Hami
Store closing or liquidation sales are a routine part of Chapter 11 cases involving retail debtors. These sales are consistently authorized by bankruptcy courts, despite lease provisions purporting to forbid them.
Phil Jelsma, a partner and chair of the tax practice team at a San Diego-based commercial real estate law firm talks about the changes to carried interest, how this will impact commercial real estate investment and what investors should do now to comply.
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