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What Happened: When Sears went bankrupt, its Mall of America (MoA) lease was taken over not by another retailer, restaurant, or amusement venture, but by Transform Leaseco LLC, a “very unshopping-mall-like” corpora...
Courts have made it very clear that a landlord who allows a tenant to sell counterfeit goods on its property can be liable for “contributory infringement.” Not satisfied with prosecuting small-fry retailers, Louis Vuitton, Coach, and the makers of Ray Bans and Omega watches have gone after the landlords of properties where tenants sold counterfeits of their luxury goods—and each walked away with seven-figure awards. So even if you hav...
So much retail business is done online that it’s common for tenants that are pulling in profits that way to use their brick-and-mortar spaces for purposes related to the business, but not to actually sell products. For example, a tenant with a successful website might turn its store into a service center, a display room, or merely a counter where customers can return or exchange online purchases. But if there isn’t merchandise for sale, it’s bad for yo...
More than 300 mass shootings have taken place in the U.S. since 2000. More often than not, these incidents take place on commercial property and lead to legal action against the landlords and tenants at the site.
SITUATION: A tenant leases property to operate a car wash. The lease requires the tenant to keep the property in good repair. The actual language:
The Tenant shall keep the Demised premises in good condition and repair . . . the tenant, at its sole cost and expense, will take good care of the Demised Premises . . . and will keep the same in good order and condition and make all necessary repairs thereto, interior and exte...
An increasing number of retailers sell both new and “vintage” or consigned merchandise. But if you want a retail tenant’s space to be used solely or primarily for sales of new merchandise, then you’ll need to say this in the lease’s use clause. And be aware that using a term other than “new”—such as “retail”—may backfire, letting the tenant move its new merchandise to another location and keep less profit...
Leasing to a non-U.S. business raises special legal considerations. For example, you may be unable to enforce lease payment obligations and court judgments against tenants who keep their assets outside the U.S.
So, before signing a lease with a foreign tenant, confirm that the tenant keeps adequate assets in the U.S. and add lease language expressly requiring the tenant to maintain U.S. assets at no less than that level during the lease term.
Giving tenants construction allowances to make improvements to the property exposes you to legal risks. If the tenant doesn’t pay its contractors, they may try to collect the debt from you, which can include placing a mechanic’s lien on the property. Requiring the tenant to get “lien waivers”—that is, contractual agreements by a contractor to waive its lien rights with regard to the contract work—from its contractors is one way to pro...
If your lease requires tenants to pay you their share of the property/facility’s electric bill, don’t say they have to pay for the electricity they “consume.” That’s because the bills you receive from the electric company may include elements not related to consumption, such as demand charges. So, using the word “consume” may preclude you from passing along these non-consumption charges to your tenants.
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