Modifications to the Shopping Center: A Tenant's Perspective
June 01, 2004
In most shopping center leases across the country, there is a provision that relates to the landlord's right to modify, change, add to, subtract from, and/or alter the size, dimensions, character, and construction of the shopping center. Very often, these provisions further grant the landlord the right to change the entrances, the number of parking spaces, the dimensions of hallways and corridors, the number of floors, the placement of kiosks, carts and retail merchandising units in the common areas, the location and arrangement of the common areas, and the merchandising mix of tenants. Generally, this type of a provision is viewed as boilerplate within the lease document and does not receive a great deal of negotiation from tenants.
Proportionate Share Adjustments: Tenants Beware of Costly Calculations
June 01, 2004
Most retail and shopping center leases contain a provision — which appears fair and reasonable on its face — to the effect that the tenant's proportionate share of the center or retail area is fixed at a certain percentage, <i>eg,</i> 35%. This percentage is then utilized by the landlord for the purpose of calculating the tenant's contribution to real estate taxes, common area maintenance expenses, and insurance premiums incurred by the landlord in operating the center or building. However, it's not always simple to calculate that share. For example, assume a theater tenant negotiated a lease in a center under construction, which provided that its proportionate share of the center was 35.2%, based upon the detailed plans and specifications for the center then in existence. Upon completion of the center, the tenant was presented with a statement by the landlord advising that the theater occupied 50%. In addition, when the theater tenant was negotiating the lease, it was advised by the landlord that its share of the common area maintenance charges was estimated at approximately $250,000. The bill the tenant received for its share of common area maintenance charges for the first year of operations was approximately $3 million. How could this happen? And how can you prevent this from happening? Read on.
In the Spotlight: Negotiating a Meaningful Right of First Offer, First Refusal
June 01, 2004
Rights of first offer and first refusal are frequently sought by tenants, especially for space contiguous to the original leased premises, in order to give tenants a combination of flexibility and leverage when dealing with their potential expansion requirements. Landlords are understandably reluctant to grant such rights, as they may interfere with the landlord's ability to accommodate the future needs of existing or prospective tenants.
Draw on Letter of Credit Has Same Effect As Cash Forfeiture
May 27, 2004
It is well-settled that "property of the estate" is broadly defined under section 541 of the Bankruptcy Code as including all legal and equitable interests of a debtor. Therefore, the breadth of property of the estate includes a debtor's indirect, residual or reversionary interest in the return of funds. It is also equally acknowledged that, in general, a letter of credit (LC) is an independent obligation of the issuing bank and, under the "independence principle," is not necessarily property of the estate. From time to time, these two concepts -- broad estate interest in property versus the treatment of a LC -- clash in bankruptcy. In these instances, some courts will look at "substance" and not "form" to determine whether the debtor's residual interest in an LC is property of its estate.
Tort Liability of Out-of-Possession Landlords
May 24, 2004
<i>Ingargiola v. Waheguru Management, Inc.</i>, decided recently by the Second Department, revisited a question that has long engendered confusion in the New York courts: What liability does a landlord bear for personal injuries suffered in leased premises? <i>Ingargiola</i> also presented a related question: What steps can a landlord take to reduce exposure for any liability the landlord would otherwise bear? This article explores those issues.
Landlord & Tenant
May 11, 2004
The most recent rulings affecting you and your practice.
Index
May 11, 2004
Everything that's contained in this issue in an easy-to-find format.
Real Estate Investment Trusts: A Growing Trend
May 11, 2004
REITs were invented in the US by legislation enacted in 1960 to enable small investors to make equity investments in large-scale commercial real estate in the same way they invested in large corporations in other industries. This chapter examines the requirements than an entity must satisfy to qualify as a REIT, the development of REITS, and the advantages of REITs.
