The Sales Volume Termination Clause: Protecting the Landlord's Interests
As the popularity of lifestyle center developments continues to grow, the national and regional small-shop tenants forming the leasing backbone of these projects persist in their efforts to negotiate lease rights traditionally granted only to anchor tenants just a few years ago. One such right is the sales volume termination right. Generally, the sales volume termination clause allows a tenant to terminate its lease in the event sales from the tenant's premises do not exceed a predetermined sales volume during a specific period of time. The primary purpose of this clause is to provide a tenant with an exit strategy for an underperforming store. Although the cause of such underperformance may be attributable to a struggling shopping center, alternate causes include poor store management and misguided merchandising decisions, among others. Certainly, landlords would prefer to avoid granting tenants any termination rights; however, the relative bargaining position of the parties may require that the landlord concede to the tenant's insistence for a sales volume termination right. If a landlord finds itself providing a sales volume termination right, then the sales volume termination clause should be structured to address the tenant's specific concerns rather than serve as an open-ended
What's in a Vanilla Box?
When negotiating a long-term lease, the landlord and the tenant should specifically agree upon the condition that the premises will be in at the time of delivery by the landlord to the tenant. Too often phrases such as "vanilla box," "warm vanilla box" and "as-is condition" are utilized by leasing representatives to describe generically the condition that the premises will be in at the time of delivery. However, the differences between what each party means by those terms can be dramatic. By specifically addressing the condition of the premises, landlords and tenants may avoid costly disputes once the lease has been executed and the landlord delivers the premises. This article addresses the terminology and the common pitfalls associated with the terms "vanilla box," "warm vanilla box" and "as-is condition."
In the Spotlight: Lien Waivers ' What Do They Really Mean?
Lien waivers are a staple of construction projects. Everybody knows the importance of obtaining a lien waiver, although many owners and contractors never bother to collect them. However, do they know where the waiver forms themselves come from or what the waivers really mean? Unfortunately, many owners, contractors and subcontractors cannot answer these questions, and the consequences are often devastating.
Let's Get Relevant
Tremendous volumes and increasing varieties of electronic information create onerous burdens for corporations dealing with discovery requests, internal investigations and response to regulatory agencies. <br>To help combat this technology burden, corporations are employing document-analysis technology to accelerate the identification of relevant information. An emerging best practice, this approach yields considerable cost and time benefits that help law firms reduce discovery risk and expense for their clients.
Native File Review: Simplifying e-Discovery?
To read some accounts, the ability to review documents in their original format will provide perfect insight into the treasure trove of discoverable information. To read others, reviewing in native formats is the road to ruin. <br>Perhaps, somewhere between these extremes, lies the truth. Using files in their native format has some drawbacks and some advantages. In the end, it's an understanding of these pros and cons that may permit the savvy litigator to gain a true advantage through e-discovery.
Document (mis)Management
Cases with corporate spoliation sanctions have drenched the legal marketplace in the first half of 2005. Organizations that have failed to locate, preserve and produce electronic documents have found themselves the subject of unwelcome headlines and subject to adverse-inference jury instructions, default judgments and huge damage awards. <br>The first half of this year demonstrates that courts are not afraid to hold companies and their budgets accountable for deficient discovery practices.
Electronic Data Discovery: It's All About Access
In last month's newsletter, author Trey Wilkins covered the impact of non-native file restoration on the field of e-discovery, how the method works, and how to eliminate data-retrieval barriers. This month, a look at how non-native restoration has been used with great success in a variety of situations by numerous organizations.
Commercial Leases As an Asset of the Landlord and Tenant
Tenants and landlords should view the lease as an asset of their business. A lease cannot be entered taking into account only those conditions existing as of the date of execution. The terms of the lease will bind the parties for a considerable period, and it is important to draft the lease carefully up front in order to accommodate current and future circumstances. This article addresses the lease as an asset from the tenant's perspective, then from the landlord's perspective, and finally suggests how to approach negotiating potentially conflicting ideas about how to preserve this "joint" asset.
Does Your Lease Have an Operating Covenant?
A retail lease should include a covenant requiring a tenant to operate in the premises. The covenant needs to state clearly and unequivocally that a tenant will be required to operate in the premises for the term of the lease. The active and open operation of tenancies is the essence of retail and what ultimately makes for a successful shopping center. A clear operating covenant, or lack thereof, also facilitates the party's exit strategy from the lease, something which is often more important than the actual operation of the business in the premises.
Tenant's Estoppel Letter Does Not Trump the Lease
An "estoppel certificate" is a written statement by a party having an interest in property that defines and describes that interest so that other parties contemplating taking an interest in the same property will be informed about the nature and extent of that interest. Typically, the party signing the certificate is not a party to the transaction by which the third party is acquiring its interest. But the certificate is worded in such a way so that the party signing it is made aware of the reliance of the third party, and thus the signing party would be "estopped" from asserting matters different from those appearing in the certificate as against the third party upon completion of the transaction.
