BACK TO SCHOOL

August 2015

It’s that time of year!  In the spirit of back to school, below is a pop quiz on real estate leasing law.  If you want to brush up on your legal knowledge, mark your calendar for January 13 – February 3, 2016 (Wednesday evenings), when Mr. Ravid will be teaching a four-week course at UCLA titled, “Understanding and Negotiating Real Estate Leases.”  More details on the leasing course to follow.

POP QUIZ
  1. If a landlord does not expressly permit or prohibit a tenant from assigning or subletting a lease, does a tenant have the right to assign or sublease?

 

  1. If a lease executed in 2015 provides a tenant with non-disturbance protection in the event of a foreclosure, can a lender who made a loan in 2012 foreclose on the landlord’s property and terminate the tenant’s lease?

 

  1. If a co-tenancy provision gives tenant #1 the right to abate rent in the event tenant #2 goes dark, can tenant #1 abate its rent even if it does not anticipate any harm to it based on tenant #2’s failure to operate?

 

  1. If a tenant agrees to continuously operate from the premises for only one day, but chooses to never open, can a landlord recover consequential damages including loss of diminution of value of the property?

 

  1. If a landlord signs a non-binding LOI that gives an estimate of CAMs, but the lease is silent on CAMs, can a landlord be held liable if the actual CAMs end up being significantly higher than the original estimate provided in the non-binding LOI?

 

  1. In California, if a tenant surrenders the premises to the landlord, and the landlord does not take any steps to mitigate its damages, can the landlord still recover all of the outstanding rent from the tenant?

 

  1. In New York, if a tenant surrenders the premises to the landlord, and the landlord does not take any steps to mitigate its damages, can the landlord still recover all of the outstanding rent from the tenant?

 

  1. Are radius restriction clauses generally considered to be unenforceable because they unfairly prohibit tenants from opening stores in other locations?

 

  1. If a tenant goes dark, can a landlord recover a daily fee on top of the normal rent due to the landlord’s loss of goodwill, synergy, and patronage in the center caused by the absence of the tenant?

 

  1. Are exclusive use clauses generally considered to be unenforceable because they stifle completion and are therefore against public policy?

DISCLAIMER:  The correct answer for all of these questions is: “It Depends.”  In the law, there are always exceptions to every general rule.  The results of a court decision often turn on multiple nuances and distinctions from case to case.  Having said that, below are the answers based on the general rules:

  1. Yes
  2. Yes
  3. No
  4. No
  5. Yes
  6. Yes
  7. Yes
  8. No
  9. Yes
  10. No