Commercial Litigation

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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Commercial Leasing Law & Strategy

A Guide to Becoming an Opportunity Zone Sponsor

Kelsi Maree Borland

There is a frenzy of excitement about the prospect of opportunity zone investments, but a number of investors are also considering becoming sponsors of the new fund model. While organizing a fund may seem simple, especially for experienced real estate sponsors, the opportunity zone model is actually complex.

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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

Common-Area Risk Abatement: Who is Responsible?

Janice G. Inman

When customers, employees and others invited to or simply passing by a leased commercial property are injured, and want compensation, who will be on the hook for the costs of bodily injury and property damage — the landlord, the tenant, the maintenance and security contractor hired by them, or some combination of these?

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Commercial Leasing Law & Strategy

The Bankruptcy Code’s Inherent Limitations for Struggling Golf Courses

Daniel A. Lev

Part Two of a Two-Part Article

As addressed in the first part of this article last month, addressing the problems confronting golf course owners seeking financial restructuring under Chapter 11, the ability of a debtor to reject a restrictive covenant under Section 365 or to sell free and clear of a covenant under Section 363(f) is limited and the obstacles are difficult to surmount.

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Commercial Leasing Law & Strategy

Commercial Rent Control in New York: Back Again?

David B. Saxe and Brett Dockwell

As retail vacancies have multiplied in New York City in recent years, some in the City Council have advocated for the reconsideration of commercial rent control, as set out in a proposed piece of legislation, the Small Business Jobs Survival Act This article provides a brief, nontechnical review of the bill and the legal and practical hurdles it faces if enacted.

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Commercial Leasing Law & Strategy

What to Consider When Drafting Renewal and/or Expansion Terms in Arbitration Clauses

Elizabeth Kluger Cooper and Kimberly C. Jones

Navigating through a murky arbitration clause is no easy feat. Assuming familiarity with the basics, the following is a list of considerations that should prove valuable whether representing the tenant or the landlord.

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Commercial Leasing Law & Strategy

The Bankruptcy Code’s Inherent Limitations for Struggling Golf Courses

Daniel A. Lev

Part One of a Two-Part Article

This article describes conflicts with zoning boards and neighbors as it relates to distressed golf course properties and the methods sometimes available in the bankruptcy realm for working around the problem of restrictive covenants that run with the land.

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Commercial Leasing Law & Strategy

Case Notes

Without Contractual Consent to Inspection, Lack of Protest Doesn’t Excuse Landlord’s Trespass
Resulting Trust Found Where Commercial Property Held in Just One Partner’s Name

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Commercial Leasing Law & Strategy

A Little Knowledge Goes a Long Way: A High-Level Overview of Liability Insurance Provisions in a Retail Lease Agreement

Lisa A. Weixelman and Amber J. Simon

Despite their seemingly lackluster nature, well-drafted insurance provisions in a contract between a landlord and tenant can be extremely important when it comes to mitigating potential exposure and protecting a shopping center’s assets.

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The Bankruptcy Strategist

Fifth Circuit Holds Asset Purchaser Unable to Acquire Rejected License Agreement

Michael L. Cook

A license agreement “deemed rejected by operation of law” could not be acquired under a court-approved asset purchase agreement, held the U.S. Court of Appeals for the Fifth Circuit

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Commercial Leasing Law & Strategy

Due Diligence in Distressed Community Hospitals

Deborah Williamson, Mark Andrews and Richard Y. Cheng

Many community hospitals are in distress. The causes are varied but have a constant theme — the cost to adapt to a rapidly changing environment.

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The Bankruptcy Strategist

Secured Creditors Beware of Your Descriptions, Nomenclature and Terminations

Deirdre M. Richards and Howard C. Rubin

Secured creditors can learn a great deal from a few recent bankruptcy cases involving the Uniform Commercial Code that remind us that the “devil is in the details.” These cases show that it is unrealistic to expect forgiveness by a court after a misstep involving Article 9 of the UCC.

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Commercial Leasing Law & Strategy

The Gold Rush of NJ Cannabis Leasing: Avoiding a Few Traps for the Unwary

Brad A. Molotsky

In this ever-evolving space, where 30 states have permitted medical cannabis and nine states have permitted adult-use cannabis, there are many issues that come into play in a lease tailored to cannabis dispensing or grow facilities. This article sensitizes the reader to the notion that these types of leases are not “business as usual,” and that they have their own nuances.

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Commercial Leasing Law & Strategy

Case Notes

Janice Inman

Two Lawsuits, No Collateral Estoppel
No Meeting of the Minds in Forged Lease

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Commercial Leasing Law & Strategy

‘Shell Game’ Gets Away From Commercial Lease Guarantor

Janice G. Inman

In the real estate business, as in many others, the question of just who is contractually responsible when things go wrong is a recurring one, particularly when a closely-held corporation or other business entity is involved.

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Commercial Leasing Law & Strategy

Early Termination Provisions: A Landlord’s Saving Grace … If Done Right

Menachem J. Kastner and Ally Hack

The focus of this article is the “early termination provision,” a lease provision that affords landlords the tactical advantage they need. Specifically, this article seeks to: 1) guide the practitioner through the pitfalls of a poorly drafted termination provision; and 2) advise the practitioner how to craft a proper and effective termination provision.

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Commercial Leasing Law & Strategy

Case Notes

Subtenants Not Entitled to Notice Under Law
Illegal Tenant Activity Negates Insurer’s Responsibility to the Landlord

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Commercial Leasing Law & Strategy

When Can a Landlord’s Consent to Assignment be Reasonably Withheld?

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.

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Commercial Leasing Law & Strategy

Store Closing Lease Rejection in 'Shiekh Shoes'

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.

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Commercial Leasing Law & Strategy

Inside the New Tax Act’s Changes to Carried Interest

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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Commercial Leasing Law & Strategy

Case Notes

Insurance Lapse Deemed Not Curable
Uncertain Method for Determining Future Rent Dooms Renewal Rights

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Commercial Leasing Law & Strategy

New Development Projects: The Reports of Demise Were Greatly Exaggerated

Michael R. Leighton

Numerous shopping center developers use a “layer-cake” of financing, including state and federal tax incentives to reduce the costs of debt and equity financing. The industry correctly saw that the market value of the credits would drop once the Jobs Act become effective. Such tax cut could undoubtedly impact the ability of developers to raise equity, certainly for new projects not yet placed in service.

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The Bankruptcy Strategist

'Secured Lender's Corner:' Protecting the Secured Lender Before a Mortgagor or Lessee Files Bankruptcy

Deirdre M. Richards and Howard C. Rubin

It is important for a secured lender to protect itself when entering a transaction with a borrower or lessee to avoid a total loss if the borrower or lessee files a bankruptcy petition or if the leased equipment is damaged, missing or both.

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Commercial Leasing Law & Strategy

Opportunity Zones and Commercial Real Estate

Erika Morphy

One of the many provisions of last year’s tax overhaul was the creation of a little-noticed program called Opportunity Zones, which was designed to give investors tax breaks for investments in designated areas. Now, attention is starting to pick up as the program takes shape.

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Commercial Leasing Law & Strategy

Summary of Developments Under New York’s Environmental Quality Act

Michael B. Gerrard and Edward McTiernan

The courts issued 41 decisions in 2017 under the New York State Environmental Quality Review Act, and changes were made to regulations themselves this year. This article summarizes the most important of these cases and regulation changes, and the patterns they represent.

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Commercial Leasing Law & Strategy

Case Notes

Tenant Improvement Does Not Shift Repair Responsibility Away from Landlord
Attorney Fees Not Court-Ordered Cannot Be Recouped by Withholding Rent

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Commercial Leasing Law & Strategy

Waiving the Right to Yellowstone Injunctive Relief

Janice G. Inman

In a case of first impression, and after it decided public policy would not be offended, New York’s Appellate Division, Second Department, decided earlier this year that commercial tenants may contractually waive the right to seek a Yellowstone injunction in 159 MP Corp. v. Redbridge Bedford,

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Commercial Leasing Law & Strategy

The Tax Cuts and Jobs Act and How It Affects Real Estate

Peter M. Fass

Part Two of a Two-Part Article

Part One of this article discussed changes affecting real estate including the pass-through business deduction adopted in new §199A of the Tax Act. Part Two expands upon the workings of the pass-through business deduction (pass-through deduction).

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Commercial Leasing Law & Strategy

Tenant Liability CERCLA Changes Under 2018 BUILD Act

Nicole TK Moore

One of the significant updates to the law is that now, a tenant at an industrial or manufacturing site can, under appropriate circumstances, claim the “bona fide prospective purchaser” defense to Superfund liability and escape strict, joint, and several owner/operator liabilities when leasing previously-contaminated property.

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Commercial Leasing Law & Strategy

Case Notes

Lease Assignee Can Make Claim that Appears to Concern Only Property’s Owners

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