A Guide to Landlord Lien Waivers
Businesses borrow money. Security for the repayment of a loan often includes a lien granted by the borrower to its lender on the borrower's equipment, trade fixtures and inventory ("Tenant's Property"). A lender and its borrower can expend significant time and resources negotiating the loan documents whereby the borrower grants the lender a security interest in Tenant's Property. Of course, businesses also frequently lease the space in which they conduct their operations ("Leased Premises"). If they plan to locate portions of Tenant's Property within a Leased Premises, a conflict of interests inevitably arises between the lender and the owner of the Leased Premises, <i>ie</i>, the borrower's landlord. A lender will want to obtain an unfettered right to enter the Leased Premises and remove the Tenant's Property without being deemed a trespasser or a converter of any interest of the landlord in Tenant's Property.
In the Spotlight: Outparcel Leasing and Sales ' Concepts to Consider
When leasing or selling parcels of property that are located outside of an enclosed shopping center but within the perimeter of the shopping center property (<i>eg</i>, along the interior road of the shopping center, along the peripheral boundary of the shopping center, or along shared parking fields of a shopping center), a landlord should consider several concepts that may not be considered critical issues when leasing in-line space. However, for purposes of leasing or selling outparcel locations, these concepts are not only financially important to the landlord, but also will impact the day-to-day operations of a shopping center. These concepts include parking, insurance/casualty, maintenance and repair, and signage.
Best + Efforts = ?
There is a common misconception that the obligation to satisfy a "best efforts" clause requires rigorous performance, regardless of hardship or cost to the promisor. This misconception of the meaning of the term "best efforts" stems from the divergence between common parlance and jurisprudence. Considering the term in the vernacular, "best efforts" implies superlative action. Therefore, when one puts forth one's "best efforts," such action is not simply good, or better, but the best according to one's capabilities. James M. Van Vliet, Jr., <i>"Best Efforts" Promises Under Illinois Law,</i> Ill. B.J. 5 (Dec. 2000). The implication is that to satisfy a promise for "best efforts," there is no limit as to what one will do, no hardship or expense too great to satisfy the obligation. In fact, it would appear that many believe this to be the definition of "best efforts."
Can a Remedies Opinion Be Given on an Equipment Lease?
We know what an equipment lease is. The Uniform Commercial Code defines it for us: "'Lease' means a transfer of the right to possession and use of goods for a period in return for consideration ... " UCC '2A-103(p). "Goods" include equipment. <i>Id.</i> '2A-103(n). If an agreement qualifies as a lease, then the "lease contract is effective and enforceable according to its terms between the parties, against purchasers of the goods and against creditors of the parties." UCC '2A-301. What could be clearer?
In The Marketplace
Highlights of the latest equipment leasing news from around the country.
FAS 140 Transfers Exposure Draft: A Primer for Structured Finance
In the world of corporate finance, a large segment of debt capital traditionally has been raised by issuing secured debt. In structured finance transactions, by contrast, money is raised by selling financial assets, such as mortgage loans, leases, auto loans or student loans, to a separate special purpose entity (an "SPE"), that often is a subsidiary of the seller, and causing that entity to issue securities backed by those financial assets.
Revisiting Boilerplate or 'Miscellaneous' Lease Provisions
Part One of this article addressed issues surrounding the name and address of the subject building and the landlord's right to prescribe rules and regulations. The conclusion discusses lease provisions pertaining to legal fees and expenses and the sale or exchange and assignment by the landlord.
Economic Interdependency and Big Box/Anchor Store Closings
A decision is being contemplated to close one or more stores. Factors for closing stores may vary. Possibly the store is not performing well, the store does not fit within the new prototype, the retailer is pulling out of a geographic area, or a host of other business reasons may be factors considered in determining to close a store.
