Commercial Litigation

Commercial Leasing Law & Strategy

Reset Clauses In Ground Leases

Peter E. Fisch and Mitchell L. Berg

The purpose behind rent reset clauses is simple — to capture any change in the fair market value (and fair market rental value) of the leased property. However, the application of rent reset clauses in practice is anything but simple, and the consequences of such clauses can be significant.

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Commercial Leasing Law & Strategy

Flood and Terrorism Insurance Reauthorization: Safe for Now

Jeffrey B. Steiner and Scott A Weinberg

Federal programs have made insurance more readily accessible to protect real property in the event of a flood or an act of terrorism. These programs enable flood and terrorism insurance to be widely available at realistic price points by ensuring that the amount of the premiums payable for such insurance remain at a level that a borrower can afford, which in turn preserves the underwritten economics of the loan transaction.

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Commercial Leasing Law & Strategy

Local Law Banning Music Festival Is Not Unconstitutional Restraint of Speech

Steven M. Silverberg

A landowner challenged local zoning that banned holding a three-day music festival, arguing that the law was an unconstitutional violation of free speech and void for vagueness.

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Commercial Leasing Law & Strategy

Tips to Minimize Landlord’s Exposure When a Commercial Tenant Files Bankruptcy

Carmen Contreras-Martinez

Because bankruptcy can add significant expenses and increase the time it takes to remove a delinquent tenant, landlords should not allow tenants to fall far behind on rental payments. Here are some tips on how to address the issues raised by a bankrupt tenant.

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Commercial Leasing Law & Strategy

High-Street Retail in an Adjustment Phase

Kelsi Maree Borland

High-street retail is going through an adjustment period, but for properties that check the right boxes, there are still active buyers. In some cases, even bidding wars.

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Commercial Leasing Law & Strategy

Case Notes

Miami Agrees to Settle Costly Island Development Dispute After Losing Key Ruling
Breach of Lease By Subsidiary Does Not Justify Piercing Corporate Veil
Tenant Not Entitled to Preliminary Injunction Requiring Landlord to Co-Operate

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Commercial Leasing Law & Strategy

Recent Investigation, Prosecution and Legislation Regarding Fraudulent Deeds

Carol A. Sigmond

New York City is seeing an upsurge of deed theft. Attorneys, architects, title companies, real estate brokers, agents, contractors, developers and construction managers need to be alert to this potential issue when blocks of properties are assembled for development in these neighborhoods.

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Commercial Leasing Law & Strategy

Unfolding Trends That Will Dominate the Next Year

Erika Morphy

For all intents, 2019 has been good for commercial real estate. 2020, at least for the first half, promises much of the same. That is not to say that the CRE environment will be stagnant; as always there will be changes. Some of these will be subtle while others may well be more ground shaking — and likely due to outside circumstances.

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Commercial Leasing Law & Strategy

Adding Value, Reducing Risk: Peer Review for Construction Projects

Jacqueline Greenberg Vogt

In the aftermath of recent construction disasters leading to catastrophic failures and loss of life, the concept of peer review has taken on an entirely new significance. A comprehensive plan and specification peer review is an effective risk management strategy for ensuring quality construction.

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Commercial Leasing Law & Strategy

How Retailers Are Pushing the Boundaries

Kelsi Maree Borland

Entertainment and experience has become the cornerstone of retail survival in the wake of increasing online shopping. Now, top brands are starting to incorporate entertainment experiences into select markets to bush the boundaries of the traditional retail structure.

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Commercial Leasing Law & Strategy

Case Notes

Scott E. Mollen

Landlord’s Oral Request for Use and Occupancy in Commercial Non-Payment Proceeding Denied
Landlord Sought to Pierce the Corporate Veil to Recover Unpaid Rent

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Commercial Leasing Law & Strategy

What is the Difference Between Flexible Space Models and Traditional Office Leasing?

Elizabeth Kluger Cooper and Zach Boroson

Market forces — such as workplace design, demographics and urbanization, capital flow and technology — are driving the growth of flexible space.

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Commercial Leasing Law & Strategy

Assignments and Collateral Assignments of Commercial Leases

Terrence M. Dunn

What Tenants and Landlords Should Know

There are differences between assignments of leases and collateral assignments of leases, and each has aspects that parties to these agreements should expect and look out for. Let’s discuss some of these issues.

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Commercial Leasing Law & Strategy

Why Community Groups Can Never Win Against Developers

John R. Low-Beer

The ‘Dreikausesn’ Paradox, Other Hurdles, and Suggestions for Change

Under current New York law, even the most meritorious legal challenge to property development faces insurmountable barriers once construction starts, because absent the most egregious wrongdoing, the courts will not order demolition of completed buildings, and current law makes it virtually impossible to obtain a preliminary injunction to halt construction.

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Commercial Leasing Law & Strategy

Case Notes

Janice Inman

It’s Not the Money Spent, It’s the Level of Conformance

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Commercial Leasing Law & Strategy

Structuring Strategies for Off-Balance-Sheet Treatment of Real Property Leases

Jun Kwon

The Financial Accounting Standards Board released a new set of lease accounting standards, ASC 842, which went into effect earlier this year. Most significantly, publicly traded companies are now obligated to list all leases of 12 months or longer on their balance sheets as both assets and liabilities. Large private companies will follow suit in 2020.

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Commercial Leasing Law & Strategy

159 MP Corp.: Grateful That Majority Rejected Dissent’s Radical Approach

Howard A. Levine

Further comment and analysis is warranted on the three-judge dissent, which, if adopted by the majority, would have fundamentally altered the very foundation of New York contract law.

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Commercial Leasing Law & Strategy

Case Notes

Janice Inman

Defense Based on Federal Law Cannot Confer Federal Jurisdiction

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Commercial Leasing Law & Strategy

A Tenant’s Perspective on SNDAs: Non-Disturbance Is Not Enough

James O’Brien

Part Two of a Two-Part Article

Part One of this article outlined the basic elements of a subordination, non-disturbance and attornment agreement (SNDA), which regulates two competing interests in the same property — tenant’s right to possess its premises pursuant to its lease and mortgage lender’s security interest in that same premises. Part Two explains the differences between the concepts of “non-disturbance” and “recognition,” while contending that lease recognition is more important to the tenant than not having its possession disturbed.

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Commercial Leasing Law & Strategy

Case Notes

Court Decides Who Is the ‘Prevailing Party’
No Duty to Collect Rent from Subsequent Tenant

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Commercial Leasing Law & Strategy

A Tenant’s Perspective on SNDAs: Non-Disturbance Is Not Enough

James O’Brien

Part One of a Two-Part Article

This article outlines the basic elements of an SNDA and will explain the differences between the concepts of “non-disturbance” and “recognition,” while contending that lease recognition is more important to the tenant than not having its possession disturbed.

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Commercial Leasing Law & Strategy

Fees on Fees

Joseph I. Farca

Collecting the Legal Fees It Cost You to Collect Legal Fees

Does your New York commercial lease form expressly provide that the landlord may recover the legal fees it incurs to recover legal fees from its tenant? If not, then the landlord may be out of luck trying to recover such “fees on fees,” as they are known. But it wasn’t always this way.

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Commercial Leasing Law & Strategy

New York’s 2019 Rent Laws: Impact on Commercial Landlords

Daniel J. Ansell

NY Gov. Andrew Cuomo signed legislation modifying existing rent laws and enacting significant landlord-tenant reforms. To date, the real estate industry has focused primarily on the sweeping impact the new laws will have on residential tenancies and the deregulation of rent-stabilized apartments. The reforms, however, also dramatically impact commercial tenancies by altering non-residential summary proceedings and significantly hampering the ability of commercial landlords to respond effectively and quickly to tenant defaults.

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Commercial Leasing Law & Strategy

Case Notes

Despite State Law, Merger Extinguishes Renewal Rights of Successor in Interest
Court May Rely on Parole Evidence to Show Illegal Purpose of Sublease

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Commercial Leasing Law & Strategy

Deciphering the Tax Status of Leased Property

Janice G. Inman

Is a property leased to a farming tenant a commercial property or an agricultural property? What about a building leased to a government entity? The distinction can make a difference in the tax laws that apply to the parcel.

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Commercial Leasing Law & Strategy

How a Call to Service May Impact Rights and Obligations Under a Lease

Andrew Dector

When members of the military are be called into action, the impact could be felt right here at home by our commercial landlords, especially those whose tenants are composed of businesses owned or operated by a sole proprietor, or an owner with one or two employees.

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Commercial Leasing Law & Strategy

Lessor Repossession of Property on Eve of Lessee Bankruptcy: Voluntary Turnover or Face Contempt

Theresa A. Driscoll

Lessors who repossess property immediately prior to a lessee bankruptcy filing may be required to return such property or face sanctions by the bankruptcy court. Federal courts are currently split on the issue of whether the lessor must voluntary surrender property seized pre-petition or may hold such property until the debtor obtains an order of turnover.

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Commercial Leasing Law & Strategy

Achieving Commercial Real Estate Success Post-Brexit

Mathew B. Tully and Barry Crushell 

Proper planning and the ability to pivot will help American companies with UK, EU commercial property interests.

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New York Real Estate Law Reporter

Let Freedom (of Contract) Ring: Yellowstone Waivers Are Enforceable

Joshua Kopelowitz and Richard Corde

This is the third in a series of articles exploring whether parties to a commercial lease can contractually waive a tenant’s right to seek a Yellowstone injunction. In a recent ruling, the Court of Appeals, in 159 MP Corp. v Redbridge Bedford, LLC, left no doubt that a contractual waiver of a right to seek a declaratory judgment and/or a Yellowstone injunction in a commercial lease is enforceable.

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Commercial Leasing Law & Strategy

Landlord Considerations When Drafting Assignment and Subletting Provisions

Mark Morfopoulos

Restricting a tenant’s right to transfer the property it is leasing to a third party is a key component to any lease. Many lenders require landlords to obtain lender consent before the transfer is effective. Failure to obtain such consent could lead to a landlord’s default under the terms and conditions of the loan documents, so it is imperative for a landlord to review its loan documents each time it receives a request from a tenant to transfer its interest under the lease.

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Commercial Leasing Law & Strategy

Retail’s New Normal

Natalie Dolce

Welcome to the evolving world of retail — a world that is geared toward changing the way people engage in retail and retail destinations feature a blend of entertainment, experiences and services.

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Commercial Leasing Law & Strategy

Does a Roof’s Warranty Remain Effective Under Solar Panels?

Jonathan B. King

The growing interest in alternative fuel sources may be a boon for property owners seeking new ways to generate profits and savings. But care should be taken when a roof is the proposed site of a solar-panel installation, whether managed by a property owner or by a lessee.

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Commercial Leasing Law & Strategy

Case Notes

Option to Buy Is Exercised, and ‘Tenant’ Is No Longer a Tenant

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Cybersecurity Law & Strategy

Electronic Signatures: Legal and Practical Considerations for E-Signing on the Virtual Dotted Line

Anthony J. Diana and David G. Krone

In assessing whether or how to employ e-signatures, particularly in higher risk transactions, organizations should be careful to manage the practical issues and potential legal complexities associated with e-signatures through careful assessment and a robust governance program.

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Commercial Leasing Law & Strategy

Permitted Uses: Flexibility and Adaptability

Glenn A. Browne

When negotiating permitted-use clauses under retail leases, landlords attempt to achieve the most comprehensive limitations possible so as to avoid conflicts with other tenants’ leases and violations of exclusive-use clauses that are maintained by other tenants in the retail facility. Tenants, however, should be very careful to incorporate a certain degree of flexibility and adaptability into their leases’ permitted-use clauses to take into account an evolving landscape.

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Commercial Leasing Law & Strategy

The Unlicensed Real Estate Broker in New York: Beware

Janice G. Inman

The U.S. District Court for the Northern District of New York recently determined that because New York prohibits unlicensed real estate brokers from pursuing payment in its courts for services rendered, a plaintiff who performed real estate work for a client who then did not pay had no standing to sue.

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Commercial Leasing Law & Strategy

The Best Markets for Opportunity Zone Investors

Paul Fiorilla

Opportunity zones are the latest big thing to hit the commercial real estate market, but many questions remain, including details of how deals can be structured, the best strategy for investing and just how much property there is in the zones.

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Commercial Leasing Law & Strategy

Case Notes

Expired Lease Terms Don’t Automatically Apply
Landlord Not Liable to Third Party

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Commercial Leasing Law & Strategy

Negotiating Relocation Rights

Terrence M. Dunn

Despite the apparent risks, relocation provisions are frequently not a potential tenant’s priority concern when negotiating the business points of a lease. This is a serious oversight. Signing a lease with an overly broad relocation provision can lead to many issues if the landlord elects to exercise its right to relocate the tenant.

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Commercial Leasing Law & Strategy

Negotiating Relocation Rights

Terrence M. Dunn

Despite the apparent risks, relocation provisions are frequently not a potential tenant’s priority concern when negotiating the business points of a lease. This is a serious oversight. Signing a lease with an overly broad relocation provision can lead to many issues if the landlord elects to exercise its right to relocate the tenant.

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Commercial Leasing Law & Strategy

Commercial Lease Terms: More Issues to Cover

Alan Nochumson

Part Two of a Two-Part Article

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Commercial Leasing Law & Strategy

Risks of “Baseball Arbitration” in Resolving Real Estate Disputes

Gerald M. Levy

“Baseball arbitration” refers to the process used in Major League Baseball in which if an eligible player’s representative and the club ownership cannot reach a compensation agreement through negotiation, each party enters a final submission and during a formal hearing each side — player and management — presents its case and then the designated panel of arbitrators chooses one of the salary bids with no other result being allowed. This method has become increasingly popular even beyond the sport of baseball.

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The Bankruptcy Strategist

A Clash Between ‘Free and Clear’ and Tenants’ Rights Under Bankruptcy Code Section 365(h)

Albena Petrakov

With the recent carnage in the retail industry, a lot of attention goes to the fate of landlords when their tenants seek bankruptcy protection. A recent case that brings balance is Revel AC Inc. v. IDEA Boardwalk, LLC.

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Commercial Leasing Law & Strategy

Case Notes

Contractual Allocation of Damage Risk Thwarts Insurer’s Subrogation Claim
Lacking Specifics, Lease Term Is Unenforceable

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Commercial Leasing Law & Strategy

10 Categories of Provisions to Consider in any Commercial Lease

Alan Nochumson

Part One of a Two-Part Article

When entering into a lease for commercial space, there are some items that should not be overlooked. Landlords and tenants alike should make sure that the following things are addressed in the lease, one way or another.

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Commercial Leasing Law & Strategy

Inheriting Tenants in Default?

Ira Fierstein and Michelle Palka

An Illinois Appellate Court recently 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.

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Commercial Leasing Law & Strategy

A Clash Between ‘Free and Clear’ and Tenants’ Rights Under the Bankruptcy Code’s Section 365(h)

Albena Petrakov

With the recent carnage in the retail industry, including Sears and many other retailers of all shapes and sizes, a lot of attention goes to the fate of landlords when their tenants seek bankruptcy protection.

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Commercial Leasing Law & Strategy

Case Notes

First Court’s Lack of Jurisdiction over Cause of Action Means Second Action Is Not Barred

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Commercial Leasing Law & Strategy

'Sophisticated' Losers

Joseph I. Farca

Why Commercial Fraud Claims Sometimes Fail, and the Importance of Due Diligence

If a court decision called you “sophisticated,” it was probably not intended as a compliment, but instead signaled the death knell of your fraud claim.

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Commercial Leasing Law & Strategy

Management Fees: Make Sure Your Lease Is Clear

Missy McCoy

There is no uniform approach relating to management fee provisions in leases, and courts will recognize inequities in the charging and payment of management fees when lease terms are ambiguous or a landlord or tenant fails to comply with the terms of its lease.

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