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On June 20, Commercial Lease Law Insider received the Gold Award for Best Newsletter from the National Association of Real Estate Editors (NAREE). A panel of expert judges from the Medill School of Journalism at Northwestern University selected the award winners announced at NAREE’s annual conference in Austin last week, from a record number of entries.
About every 30 seconds, somebody commits a violent crime in the U.S., according to the FBI. Crimes occur in stores, malls, office buildings, restaurants, bars, nightclubs, theaters, medical centers, parking garages, and countless other kinds of properties that are commercially leased. And when they do, victims are apt to sue the property owner for not doing enough to safeguard their security.
Percentage rent leases commonly permit tenants to deduct or exclude certain kinds of transactions that don’t generate a profit for the tenant from the gross sales on which percentage rent is due. Typical examples include revenues from gift wrapping, deliveries, repairs to items purchased from the tenant, and discount sales to employees. The problem is that these services and sales may, in fact, generate significant revenue and profits.
One of the most important aspects of any commercial lease is how it apportions responsibility for maintenance and repair of the leased premises, including the roof. Although there’s an infinite number of possible arrangements, tenants are generally expected to contribute to the costs of roof maintenance and minor repairs, while landlords retain financial responsibility for major repairs, replacement, and capital improvements. Of course, landlords and tenants can a...
Just about every lease includes a provision specifying the methods landlords and tenants must use to provide notice to each other. Deviations from notice requirements are a common source of litigation, especially when notice is required to exercise a purchase, renewal, or other lease option. We know that oral notice generally won’t suffice when a lease specifically says that notice must be in writing. Beyond that, there are no bright line rules governing how far a...
Even in this digital age where information abounds, calculating Consumer Price Index (CPI) rent escalations remains a challenge, and Insider commonly receives requests from users struggling with the issue. There’s a lot at stake. If your CPI calculations aren’t accurate, you may not get the full rent escalations to which you’re entitled. Here’s a formula to simplify CPI calculations along with a step-by-step tutorial on how to use it, as...
If a tenant exercises a renewal option without following all the procedures or requirements set out in the renewal clause, object right away. Failure to speak now may mean that you’ll forever have to hold your peace. That’s because a court might determine that in keeping silent you evidenced your intent to give up the right to enforce the renewal clause’s original terms.
Don’t rely on “implied” covenants that aren’t expressly stated in the lease if you want retail tenants to continuously operate from their space. There’s a possibility that a court will find that such a covenant exists in limited circumstances, such as when the lease requires a long-term tenant to pay a minimal base rent but substantial percentage rent while limiting the tenant’s use and ability to assign and sublet and barring competi...
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