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If you currently own or are looking to acquire a shopping center, office building or other commercial property, these transactions may bring with them some time consuming surprises and costly legal fees if existing tenants owe unpaid rent. An Illinois Appellate Court recently addressed this issue in 1002 E. 87th St. LLC v. Midway Broadcasting Corp., 2018 IL App (1st) 171691 (June 5, 2018), and ruled in favor of a commercial tenant after a new owner acquired a commercial building and attempted to collect accrued unpaid rent owed to the previous landlord. In affirming the lower court’s ruling, the court held that a subsequent landlord did not have standing to sue for unpaid rent that had accrued prior to the conveyance and explained that such standing is a right remaining with the original landlord to whom the unpaid rent is owed. Additionally, unlike other debt obligations, the court differentiated rent accrual as a chose in action that is not assignable. The decision raises questions about the strength of assignment and non-waiver lease provisions and also rights of succeeding landlords. Further, it raises concerns about the applicability of certain non-waiver lease provisions, in particular, the assignability of lease rights and obligations. Landlords, tenants, and lenders alike are now questioning whether this decision may facilitate tenants’ evasion of contractual duties upon acquisition or disposition of real estate.
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By Dana Delman and John Vukmanovic
When COVID-19-related restrictions imposed by state and local governments are lifted, there is no guarantee that they will have done more than delay the inevitable: eviction and bankruptcy. Modifications should be used to cut risk and losses. If at all possible, landlords and tenants should cooperate now to avoid that outcome.
By Ashlyn Robinson Banks
“I want them out!” When a tenant stops paying rent, landlords usually have this reaction. But what about those tenants faithfully paying rent while breaching other provisions of the lease? This article examines the eviction of a commercial tenant for non-monetary defaults.
By Joseph I. Farca
How did the artists qualify for protection under the Visual Artists Rights Act, how could the owners know whether the artists had achieved “recognized stature” warranting prevention of their works’ destruction, and what could the owners have done to avoid liability while retaining the right to dispose of their properties as they saw fit?
By Katheryn Tucker
Much attention has been paid to the devastating effects of the COVID-19 pandemic on income, unemployment and cash flow for businesses. But new research takes an eye opening look at what the shutdown of many businesses may do to the worth of commercial real estate.