Why do landlords do this?

Why do landlords try to charge tenants for the sum of increases (if any) in operating expenses, plus increases (if any) in insurance costs, plus increases (if any) in utility costs, instead of charging them for increases (if any) in the sum of operating expenses, insurance costs and utility costs? It’s so obviously unfair that landlords ought to be embarrassed even to try. I’ve even seen landlords try this approach and include in operating expenses amortization of capital expenditures which reduce utility costs. Don’t they see the absurdity of that?

Baseball arbitration – a modest suggestion for improvement

Under “baseball” style arbitration the arbitrator, when making his determination, must select as the outcome of the arbitration either one party’s proposed outcome or the other party’s proposed outcome.

The arbitrator cannot make his own determination.  When parties are required to resolve a dispute through baseball Continue reading “Baseball arbitration – a modest suggestion for improvement”

Rentable Area: A fictitious concept.

Why does the concept of “rentable” area exist at all?  When one purchases a gallon of gas, one gets a gallon; when one purchases a ton of wheat, one gets a ton; when one purchases a yard of fabric, one get a yard.  So why, in real estate, do we all speak of the rentable area of a building or a portion of a building? Does it make sense that we do so?  To me, no, it does not.

It seems to be generally accepted (although I’ve never seen it documented) that the concept of “rentable” area emerged Continue reading “Rentable Area: A fictitious concept.”

The tenant’s right to assign its lease in connection with the sale of its business

There is, of course, no single most important “legal” point to raise in a lease negotiation, but in many cases, if I had to pick one, it would be to make sure that the tenant has the right to assign its lease to a purchaser of its business, without the landlord’s consent and without Continue reading “The tenant’s right to assign its lease in connection with the sale of its business”

Dewey defeats landlord* — Partners in tenant LLP not personally liable on lease

In a decision last week that should gratify partners in law and other professional firms organized as limited liability partnerships, the Supreme Court of the State of New York (Justice Saliann Scarpulla) ruled, in effect, that the requirement of section 26(d) of the New York Partnership Law for a majority vote of partners in order to create personal liability on the part of Continue reading “Dewey defeats landlord* — Partners in tenant LLP not personally liable on lease”

Sublet Profit Sharing

For purposes of this post, let’s accept the notion that an office tenant should pay to the landlord a share (usually one-half) of the net profits on any sublease.  Typically the negotiation of this provision centers around what costs should be deducted in computing net profits, and most landlord forms limit this to Continue reading “Sublet Profit Sharing”

Guarantor Beware

A recent New York Appellate Division (1st Dept.) alerted me to the fact that, under New York law , a tenant’s guarantor is more liable under a lease than the tenant itself.  I Bldg Inc. v. Hong Mei Cheung,  2016 NY Slip Op 01587 (March 8, 2016) refers to prior law holding that a guarantor cannot assert a defense potentially available to the tenant unless Continue reading “Guarantor Beware”