LJN Newsletters

Highlights of the latest commercial leasing cases from around the country.

On July 23, 2004, the long-awaited proposed revisions to the Americans With Disabilities Act's (ADA) physical accessibility guidelines, the "ADAAG," were published in the Federal Register. Though the changes will take effect on Sept. 21, 2004, they will not be enforceable until adopted in their final form by the U.S. Department of Justice (DOJ). Since the proposed ADAAG have been completely reformatted to conform more closely to existing uniform accessibility standards and certain uniform building codes, it will be necessary to compare the current and proposed ADAAG specifications to understand the full scope of the changes. The proposed guidelines involve more than 230 pages of text and commentary, and it is not yet known what impact these changes will have on construction activities or how these guidelines will force landlords to modify existing leases to shift some of the responsibility of these new guidelines to tenants.

When landlords and tenants negotiate a lease, particularly a retail lease, they typically have in mind a long-term relationship. The parties enter the relationship optimistically with the hope that the tenant's business will be successful at the particular location, that the entire project will be a success and that the tenant's operations will enhance the value of the property. Given the long-term nature of most retail leases, it is vital for tenants to think ahead, while at the negotiating stage, and anticipate how their business or the shopping center in which they are located may change (for better or worse) in the future. Tenants should negotiate maximum flexibility in their leases to ensure that their leases do not contain unacceptable obstacles to the tenant's ability to exit from the lease in the event circumstances change and the tenant no longer wants to remain in the lease. This need for flexibility will be tempered by the landlord's desire to retain the original tenant with which it negotiated and is comfortable. This article discusses two types of tenant exit strategies. First, those that are beneficial to the tenant ' while the tenant remains the tenant under the lease ' such as the alteration or elimination of an operating covenant. Second, those that allow the tenant to transfer its interest in the lease whether by merger, stock sale, assignment, sublease or otherwise.

Commercial real estate professionals often draft ground leases where the Ground Lessee/ Sublessor intends to sublease the parcel to a single-use tenant entity (the "Tenant"). (See Weinberg, Scott "Issues to Address When Drafting a Ground Lease for a Single-Use Tenant," Commercial Leasing Law & Strategy, June 2004.)

In an effort to minimize the release of toxic gasses from cables in the event of fire, the 2002 version of the National Electric Code ("NEC"), promulgated by the National Fire Protection Association, sets forth new guidelines requiring that abandoned cables must be removed from buildings unless they are located in metal raceways or tagged "For Future Use." While the NEC is not, in itself, binding law, most jurisdictions in the United States adopt the NEC by reference in their state or local building and fire codes. Thus, noncompliance with the recent NEC guidelines will likely mean that a building is in violation of a building or fire code. If so, the building owner may also be in breach of agreements with tenants and lenders and may be jeopardizing its fire insurance coverage. Even in jurisdictions where the 2002 NEC has not been adopted, it may be argued that the guidelines represent the standard of reasonable care and could result in tort liability for the landlord if toxic gasses from abandoned cables are emitted in a fire. With these potential liabilities in mind, this article discusses: 1) how to address the abandoned wires and cables currently located within the risers, ceilings and other areas of properties, and 2) additional considerations in the placement and removal of telecommunications cables going forward.

The Supreme Court of New York, Appellate Division, First Department, held that a television talk show didn't owe a duty to a minor who claimed that she was sexually assaulted when she had traveled to New York to appear on a segment of the program.

Recent developments in entertainment law.

Part Two of Two Part One covered statutory licenses for sound recordings and performing rights licensing for musical compositions for webcasting purposes.…