With COVID-driven litigation ongoing across the nation, close analysis of commercial lease language is now more important than ever as many questions remain unanswered. The first wave of commercial lease disputes dealt in large part with whether commercial tenants were required to pay rent while forced to close due to the pandemic and related governmental orders. Now, new disputes are arising based on the lingering impacts of the pandemic and certain key clauses like co-tenancy, sales kickouts, operating covenants, casualty clauses and force majeure provisions are likely to play a crucial role.

For example, retail leases commonly contain co-tenancy clauses that allow tenants to reduce their rent or, in some cases, terminate the lease if key tenants or a certain number of tenants are not open and operating. These provisions are front and center given the government-mandated closures, curfews and social-distancing requirements that forced businesses to significantly alter and/or reduce their operations. As with every lease, it is important to read and understand the fine print. Some questions that we have seen arise with respect to co-tenancy clauses are:
Continue Reading Commercial Lease Disputes During the Ongoing Pandemic: The Second Wave

On June 29, 2020, the United States District Court for the Southern District of New York dismissed a challenge by several landlords to quash New York Governor Andrew Cuomo’s Executive Order 202.28 (the “Executive Order”), issued on May 7, 2020.

The Executive Order, among other things, imposed a moratorium on commercial and residential evictions during

Retail tenants are experiencing unprecedented difficulties stemming from the COVID-19 pandemic, including government shutdown orders for non-essential businesses and shelter-in-place rules that have virtually stopped all in-person shopping. Even as these restrictions are finally being relaxed to a limited degree, the dramatic effects of the pandemic will long be felt in the retail industry. This

On June 3, 2020, the United States Bankruptcy Court for the Northern District of Illinois issued one of the first decisions to apply a force majeure clause to a commercial tenant’s rent obligations in the wake of a COVID-19 government-mandated shutdown. Pursuant to an Illinois executive order, restaurant operations were limited to curbside pickup.

The

The current COVID-19 pandemic has created myriad lease issues for retail tenants who have either closed stores or are contemplating doing so imminently, and are analyzing their ability to abate rent during the closure.  We wanted to share initial thoughts.

Top level conclusions:

  1. Potential arguments depend on lease language, the law of the applicable

Next week, partners Greg Call and Jennifer Romano will present three courses to attendees at the National Retail Tenants Association National Conference in Orlando, Florida.  Greg is a long-time NRTA participant and presenter, and he received the NRTA Founders’ Service Award in 2007.  Greg will be teaching a course entitled “Read the Lease: Operating Cost

General Growth Properties has completed the spin-off of 30 shopping malls into a publicly traded real estate investment trust called Rouse Properties, the Chicago-based company announced.

The properties in question are scattered across 19 states and are located in either small U.S. cities or in what are viewed as second-tier centers in larger cities

Simon Property Group was sued recently for using anticompetitive tactics to prevent key retailers from following through with lease agreements. Gumwood HP Shopping Partners LP alleges that Simon has a pattern of abusing its power to bully its tenants into complying with its wishes. The suit asserts Simon engaged in monopolization, attempted monopolization and restraint of trade in violation of the Sherman Act.
Continue Reading Simon Property Group Accused of Using Anticompetitive Tactics

Under many retail leases, the tenant is required to pay the landlord for electricity used to operate the retail store. Lease provisions regarding electricity charges are often complex or unclear, and provisions regarding how to allocate electricity use to each tenant and what rates to charge vary substantially. Often, retailers are charged for more electricity

Anyone who works with retail leases knows that leases are not all the same, and the parties cannot assume that cookie cutter language will meet all needs. However, if you work with leases in unusual locations, such as a theme park, the differences are even more significant and the impact on profitability can be staggering.
Continue Reading Unusual Retail Locations Require Special Attention to Lease Language