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

As previously reported, Simon Property Group, Inc. recently acquired Prime Outlets Acquisition Company, LLC. This gained the attention of the FTC, which determined that the merger would result in reduction or elimination of competition among outlet centers in southwest Ohio; Chicago, and Orlando. Now, as part of a settlement with the FTC, Simon will divest some of its property and modify certain tenant leases.
Continue Reading Simon Reaches Agreement with FTC over Prime Outlets Acquisition; Comments Due December 10

Traditionally, retail tenants have sought to include provisions in their leases explicitly giving them the right to audit landlords’ books, particularly with regard to common area maintenance (CAM) charges. However, case law suggests that a retailer may not be out of luck if its lease is silent as to audit rights. Tenants should also be aware that even where audit rights are set out in a lease, landlords often insert restrictive clauses that seek to limit tenants’ rights to recover overcharges in court.
Continue Reading The Effect of CAM Audit Clauses in Retail Leases

As shopping center occupancy rates have decreased, enforcing co-tenancy rights has taken center stage for retailers. The key to enforcing rights under a co-tenancy provision is to rely on the plain language of the lease.

For example, in the past year, courts in Michigan and Georgia have ruled in favor of Rainbow, USA in co-tenancy disputes based on the precise language of co-tenancy provisions in the leases. In both cases, the court relied on the plain language of Rainbow’s leases to hold that Rainbow was entitled to pay reduced rent based on the landlord’s failure to meet co-tenancy requirements under the lease.


Continue Reading Co-Tenancy Disputes With Landlords Are Decided Based on the Plain Language of the Lease

Like any charge under a retail lease, insurance charges can be the source of disputes between retail tenants and their landlords.  Special concerns arise when the landlord chooses to self-insure against certain risks.  It is not uncommon for a large landlord to self-insure at least a portion of its insurance obligations or for a landlord

As retailers continue to close underperforming stores and look for other ways to cut costs in a weak economy, they are closely monitoring and enforcing co-tenancy provisions in retail leases.

The language of the lease is critical in co-tenancy disputes.  Issues that arise include:

  • What conditions trigger a tenant’s co-tenancy rights? Closure of anchor stores? Closure of stores occupying a certain percentage of the leasable space in the mall?


Continue Reading Retailers Look To Cut Costs By Enforcing Co-Tenancy Provisions