In the Spotlight: Beware of Operating Expenses Incurred Subsequent to the Lease Term
Most leases that provide for a pass-through of operating expenses to tenants provide for an equitable proration of such expenses for any partial lease year. The typical language provides that the tenant is liable for its proportionate share of operating expenses incurred by the landlord for any period during the lease term. The arithmetic is very simple — if the lease expires on March 31st, the tenant is responsible for its share of expenses incurred by the landlord through March 31st.
How Commercial Landlords Can Position Themselves to Deal With Current Marketplace Conditions
The uncertainty of the duration of the downturn in the commercial leasing market, the vast amount of available first-and-second generation space and the increasing number of tenant bankruptcies have resulted in a situation where landlords must position themselves to endure potentially devastating economic times. Cutting rental rates and providing previously unheard of tenant concessions such as short-term leases and long periods of 'free rent' may seem like the only alternatives, but they are not. Landlords can enforce existing provisions in their leases and incorporate additional provisions into their lease forms that will improve their position in the marketplace.
Managing Fiscal Fundamentals
In Part One, the author introduced the overall challenge of fiscal management in a law firm, and explained key metrics for understanding cash flow, cash gaps and revenue (collected fee receipts). This article's explanation of key performance metrics for law firms continues with measures for productivity, pricing and profit margin. We'll conclude with a brief discussion on where to focus in addressing profitability concerns, plus a few general comments on the effective use of numerical results in the larger context of organizational management.
In The Marketplace
Highlights of the latest equipment leasing news from around the country.
Selected Issues in Domestic Tax-Exempt Leasing Transactions
Lease investors have been participating in cross-border transactions for a wide variety of municipal facilities for several years. Assets have included water and sewer systems, electric and gas distribution systems, rail rolling stock and infrastructure, and convention centers. Investors have also been participating in transactions involving U.S. state and local government entities for several years. However, the preponderance of the U.S. transactions closed to date have involved rolling stock or transit facilities.
A Tale of Two Cases: Mobile Goods Require Uniformity of State Statutes
Nationwide uniformity of commercial laws has always been a fundamental goal of the drafters of Article 9 of the Uniform Commercial Code. One area, though, that has continually eluded standardization is perfection of liens on mobile goods. Financiers of mobile goods, including vehicles, vessels, trailer homes and modular offices, must grapple with arcane certificate of title statutes that vary widely from state to state. Other state statutes that regulate title and lien interests in mobile goods can become a trap for the unwary. The nature of mobile goods makes uniformity among state statutes a compelling issue for financiers.
Debtor May Assume License as Executory Contract Despite Anti-Assignment Language
In a recent decision of interest to the leasing community, the U.S. District Court of Maryland has held that a Chapter 11 debtor could assume a software license agreement (SLA), as an executory contract, although the agreement contained a clause that the debtor could not "assume or assign" the agreement, and even though the assignability of the SLA was clearly precluded by federal copyright law.
Five Deadly Sins: Lease Clauses a Landlord Should Refuse to Negotiate Under Any Circumstances
When a landlord or its attorney prepares an initial draft of a lease on the landlord's form, it is expected that the tenant will simply sign the lease (but only if the tenant believes it has no leverage whatsoever), return the lease with handwritten comments, or, if the tenant's comments are extensive and it has taken control of the drafting process, return a black-lined copy of the lease that it has revised.
