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Retail Leasing: Drafting and Negotiating the Lease

Skillfully negotiate and draft retail leases. Get guidance on representing landlords, large national anchors, mid-size & small-shop tenants, new legal requirements, including CASp & energy regulations and more.

Skillfully negotiate and draft leases, with guidance on:

  • Representing landlords, large national anchors, mid-size & small-shop tenants
  • New legal requirements, including CASp & energy regulations
  • Lease clauses impacted by emerging issues, such as marijuana dispensaries
  • Negotiating tenant rights & restrictions, operating expenses, security deposits, letters of credit, operating covenants, common areas, insurance, indemnity & other key retail issues
  • Drafting letters of intent, estoppel certificates, guaranties, other collateral agreements
  • Construction, expansion, damage to the premises
  • Defaults & tenant bankruptcies
  • Representing neighborhood shopping centers, power centers, regional centers, outlet centers & lifestyle centers
OnLAW RE94570

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Skillfully negotiate and draft leases, with guidance on:

  • Representing landlords, large national anchors, mid-size & small-shop tenants
  • New legal requirements, including CASp & energy regulations
  • Lease clauses impacted by emerging issues, such as marijuana dispensaries
  • Negotiating tenant rights & restrictions, operating expenses, security deposits, letters of credit, operating covenants, common areas, insurance, indemnity & other key retail issues
  • Drafting letters of intent, estoppel certificates, guaranties, other collateral agreements
  • Construction, expansion, damage to the premises
  • Defaults & tenant bankruptcies
  • Representing neighborhood shopping centers, power centers, regional centers, outlet centers & lifestyle centers

1

Introduction to Retail Leasing

Michael A. Dean

  • I.  HOW TO USE THIS BOOK  1.1
  • II.  NATURE AND IMPORTANCE OF LEASE
    • A.  Nature of Lease  1.2
    • B.  Importance of Lease  1.3
  • III.  TYPES OF RETAIL LEASES
    • A.  Free-Standing Building Not Located in a Shopping Center  1.4
    • B.  Multitenant Building Not Located in a Shopping Center  1.5
    • C.  Shopping Center
      • 1.  Shopping Center Leases  1.6
      • 2.  Types of Shopping Centers
        • a.  Described by Physical Configuration  1.7
        • b.  Described by Size and Nature of Uses  1.8
      • 3.  Shop Tenants, Big Boxes, and Category Killers  1.9
    • D.  Ground Leases  1.10
    • E.  Gross, Net, and Triple Net Leases  1.11
  • IV.  ROLE OF ATTORNEYS AND OTHERS
    • A.  Attorneys  1.12
    • B.  Real Estate Brokers  1.13
    • C.  Real Estate Appraisers  1.14
    • D.  Lenders  1.15
    • E.  Contractors; Architects  1.16
    • F.  Other Experts and Specialists  1.17
  • V.  NEGOTIATION CONSIDERATIONS; EFFECTIVE STRATEGIES AND TECHNIQUES
    • A.  Preliminary Considerations
      • 1.  Preparing Initial Draft  1.18
      • 2.  Premature Transaction  1.19
      • 3.  Sophistication and Perspective of Client  1.20
      • 4.  Attorney as Mere Scrivener  1.21
    • B.  Negotiating the Lease
      • 1.  Preliminary Observations  1.22
      • 2.  Client Negotiations  1.23
      • 3.  Attorney Negotiations  1.24
      • 4.  Who Makes Lease Decisions?  1.25
      • 5.  Representing Both Parties  1.26
      • 6.  Important Issues in Negotiating Small Tenant Leases  1.27
      • 7.  Important Issues in Negotiating Major Tenant Leases  1.28
    • C.  Nonnegotiable Leases  1.29
  • VI.  DRAFTING THE LEASE
    • A.  Parties
      • 1.  Identification  1.30
      • 2.  Due Diligence  1.31
    • B.  Clear Language  1.32
    • C.  Duty of Care and Skill  1.33
    • D.  Review of Lease Prepared by Other Party
      • 1.  Review and Report  1.34
      • 2.  Time Required for Review and Report  1.35
  • VII.  CHECKLISTS
    • A.  For Landlord or Tenant  1.36
    • B.  For Tenant  1.37
    • C.  Lender’s Requirements  1.38

2

Letters of Intent

Robert J. Sykes

  • I.  GENERAL CONSIDERATIONS
    • A.  What Is a Letter of Intent?  2.1
    • B.  Advantages to Using Letters of Intent in Retail Leasing  2.2
    • C.  Control of Drafting and Negotiating the Letter of Intent  2.3
  • II.  BINDING VERSUS NONBINDING LETTERS OF INTENT  2.4
    • A.  Binding Letter of Intent  2.5
    • B.  Nonbinding Letter of Intent  2.6
  • III.  ENFORCEABILITY OF LETTERS OF INTENT
    • A.  Parties’ Intent  2.7
    • B.  Duty to Negotiate in Good Faith  2.8
  • IV.  THE NONBINDING DISCLAIMER
    • A.  Basic Elements of the Nonbinding Disclaimer  2.9
    • B.  Supplemental Elements of the Nonbinding Disclaimer  2.10
  • V.  LEVEL OF DETAIL IN LETTERS OF INTENT
    • A.  Balancing the Need for More or Less Detail  2.11
    • B.  When to Include More Detail  2.12
    • C.  When to Include Less Detail  2.13
  • VI.  LETTER OF INTENT FOR RETAIL LEASE
    • A.  Form: Introduction; Parties; Premises  2.14
    • B.  Form: Term; Options; Rent  2.15
    • C.  Form: Security Deposit; Guarantor  2.16
    • D.  Form: Permitted Uses; Exclusive Use; Radius Restriction  2.17
    • E.  Form: Opening Covenant; Operating Covenant; Go Dark; Cotenancy  2.18
    • F.  Form: Construction of Premises  2.19
    • G.  Form: Maintenance, Repair, and Replacement  2.20
    • H.  Form: Assignment/Subletting  2.21
    • I.  Form: Parking  2.22
    • J.  Form: Tenant’s Signage  2.23
    • K.  Form: Lease Form  2.24
    • L.  Form: Expiration  2.25
    • M.  Form: Confidentiality  2.26
    • N.  Form: Brokers  2.27
    • O.  Form: Disclaimer  2.28
    • P.  Form: Signature; Acknowledgment  2.29

3

Summary of Basic Lease Information

Scott L. Grossfeld

Carolyn J. Stein

C. Gregg Ankenman

  • I.  GENERAL CONSIDERATIONS
    • A.  Purpose of Summary  3.1
    • B.  Drafting Issues  3.2
  • II.  Drafting Lease Clauses
    • A.  Form: Retail Lease (Title of Lease) (Landlord’s and Tenant’s Clause)  3.3
    • B.  Form: Introductory Lease Covenant (Landlord’s and Tenant’s Clause)  3.4
    • C.  Form: Summary of Basic Lease Information (Title of Article)  3.5
      • 1.  Form: Introductory Clause (Landlord’s and Tenant’s Clause)  3.6
      • 2.  Form: Effective Date (Landlord’s and Tenant’s Clause)  3.7
      • 3.  Identification of Parties
        • a.  Form: Landlord (Landlord’s and Tenant’s Clause)  3.8
        • b.  Form: Tenant (Landlord’s and Tenant’s Clause)  3.9
        • c.  Form: Tenant’s Trade Name (Landlord’s Clause)  3.10
        • d.  Form: Tenant’s Trade Name (Tenant’s Clause)  3.11
      • 4.  Description of Shopping Center and Leased Premises
        • a.  Form: Shopping Center (Landlord’s Clause)  3.12
        • b.  Form: Shopping Center (Tenant’s Clause)  3.13
        • c.  Form: Premises (Landlord’s Clause)  3.14
        • d.  Form: Premises (Tenant’s Clause)  3.15
      • 5.  Use of Premises
        • a.  Form: Permitted Use (Landlord’s Clause)  3.16
        • b.  Form: Permitted Use (Tenant’s Clause)  3.17
      • 6.  Lease Term; Options to Extend
        • a.  Form: Term (Landlord’s and Tenant’s Clause)  3.18
        • b.  Form: Option Terms (Landlord’s and Tenant’s Clause)  3.19
      • 7.  Rent
        • a.  Form: Minimum Rent (Landlord’s and Tenant’s Clause)  3.20
        • b.  Form: Percentage Rent Rate (Landlord’s and Tenant’s Clause)  3.21
      • 8.  Commencement Date
        • a.  Form: Commencement Date (Landlord’s Clause)  3.22
        • b.  Form: Commencement Date (Tenant’s Clause)  3.23
      • 9.  Form: Guarantor (Landlord’s and Tenant’s Clause)  3.24
      • 10.  Form: Landlord’s Address for Rent and Notices (Landlord’s and Tenant’s Clause)  3.25
      • 11.  Form: Tenant’s Address for Notices (Landlord’s and Tenant’s Clause)  3.26
      • 12.  Form: Real Estate Manager (Landlord’s and Tenant’s Clause)  3.27
      • 13.  Form: Broker (Landlord’s and Tenant’s Clause)  3.28
      • 14.  Promotional Charges
        • a.  Form: Initial Promotional Assessment (Landlord’s Clause)  3.29
        • b.  Form: Promotional Charge (Landlord’s and Tenant’s Clause)  3.30
      • 15.  Form: Radius Restriction (Landlord’s Clause)  3.31
      • 16.  Form: Security Deposit (Landlord’s Clause)  3.32
      • 17.  Form: Tenant Improvement Allowance (Tenant’s Clause)  3.33
      • 18.  Form: References; Conflicts (Landlord’s and Tenant’s Clause)  3.34

4

Premises

Gary A. Glick

Elizabeth Clark

  • I.  GENERAL CONSIDERATIONS
    • A.  Original Premises
      • 1.  Description and Grant of Premises  4.1
      • 2.  Landlord’s Reservation of Rights  4.2
      • 3.  Floor Area  4.3
        • a.  Floor Area Defined  4.4
        • b.  Verifying the Floor Area  4.5
      • 4.  Appurtenant Rights  4.6
    • B.  Expansion of Premises  4.7
      • 1.  Types of Expansion Rights  4.8
        • a.  Right of First Offer  4.9
        • b.  Right of First Refusal  4.10
        • c.  Confirmation of Terms Following Exercise of Right  4.10A
      • 2.  Continuing Versus One-Time Rights; Transferability; Expiration  4.11
    • C.  Relocation
      • 1.  Parties’ Perspectives  4.12
      • 2.  Drafting Relocation Clauses  4.13
        • a.  Scope of Landlord’s Relocation Clause  4.14
        • b.  Lease Amendment  4.15
        • c.  Impact of Relocation on Tenant’s Other Rights  4.16
        • d.  Specificity  4.17
        • e.  Finding Room to Agree  4.18
        • f.  Limiting Circumstances of Relocation  4.19
        • g.  Approving the New Premises  4.20
        • h.  Agreeing on Other Criteria  4.21
        • i.  Agreeing on Moving Concessions  4.22
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Premises (Title of Article)  4.23
    • B.  Form: Lease of Premises (Landlord’s and Tenant’s Clause)  4.24
    • C.  Floor Area Definition and Verification
      • 1.  Form: Floor Area Defined (Landlord’s Clause)  4.25
      • 2.  Form: Floor Area Defined (Tenant’s Clause)  4.26
      • 3.  Form: Verifying the Floor Area (Landlord’s Clause)  4.27
      • 4.  Form: Verifying the Floor Area (Tenant’s Clause)  4.28
      • 5.  Form: Verifying the Floor Area (Negotiated Clause)  4.29
    • D.  Reservation of Rights
      • 1.  Form: Reservation of Rights (Landlord’s Clause)  4.30
      • 2.  Form: Reservation of Rights (Negotiated Clause)  4.31
    • E.  Expansion of Premises
      • 1.  Form: Expansion of Premises—Right of First Offer (Landlord’s Clause)  4.32
      • 2.  Form: Expansion of Premises—Right of First Offer (Negotiated Clause)  4.33
      • 3.  Form: Expansion of Premises—Right of First Refusal (Landlord’s Clause)  4.34
      • 4.  Form: Expansion of Premises—Right of First Refusal (Negotiated Clause)  4.35
    • F.  Relocation
      • 1.  Form: Relocation (Landlord’s Clause)  4.36
      • 2.  Form: Relocation (Negotiated Clause)  4.37

5

Lease Term

Jonathan H. Bauman

C. Gregg Ankenman

  • I.  GENERAL CONSIDERATIONS
    • A.  Definition of Lease Term  5.1
    • B.  Term and Rent Commencement Dates  5.2
    • C.  Outside Date for Substantial Completion of Premises  5.3
    • D.  Seasonal Considerations  5.4
    • E.  Proposition 13  5.5
    • F.  Acceptance and Statement of Premises, Area, and Term  5.6
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Term (Title of Article)  5.7
    • B.  Lease Term
      • 1.  Form: Lease Term (Landlord’s Clause)  5.8
      • 2.  Form: Lease Term (Tenant’s Clause)  5.9
      • 3.  Form: Partial Month (Landlord’s and Tenant’s Clause)  5.10
    • C.  Substantial Completion of the Premises
      • 1.  Form: Substantial Completion of the Premises (Landlord’s Clause)  5.11
      • 2.  Form: Substantial Completion of the Premises (Tenant’s Clause)  5.12
    • D.  Confirmation of Commencement Dates
      • 1.  Form: Confirmation of Commencement Dates (Landlord’s Clause)  5.13
      • 2.  Form: Confirmation of Commencement Dates (Tenant’s Clause)  5.14
    • E.  Delivery of Premises
      • 1.  Delay in Delivery of Premises
        • a.  Form: Delay in Delivery of Premises (Landlord’s Clause)  5.15
        • b.  Form: Delay in Delivery of Premises (Tenant’s Clause)  5.16
        • c.  Form: Notice of Delivery; Rent Abatement (Tenant’s Clause)  5.17
      • 2.  Form: Outside Delivery Date (Tenant’s Clause)  5.18
  • III.  FORM: ACCEPTANCE AND STATEMENT OF PREMISES, AREA, AND TERM (LANDLORD’S AND TENANT’S EXHIBIT)  5.19

6

Options to Extend Lease Term

Robert J. Sykes

Carolyn V. Luong

  • I.  GENERAL CONSIDERATIONS  6.1
    • A.  Typical Option Rent Clauses
      • 1.  Fixed Rent Increase  6.2
      • 2.  CPI-Based Rent Increase  6.3
      • 3.  Fair Market Rent  6.4
      • 4.  Percentage Rent  6.5
      • 5.  Conditions on Tenant’s Right to Exercise Option  6.6
    • B.  Method of Exercising Option  6.7
  • II.  DRAFTING LEASE CLAUSES
    • A.  Option to Extend Term
      • 1.  Form: Option to Extend Term (Landlord’s Clause)  6.8
      • 2.  Form: Option to Extend Term (Tenant’s Clause)  6.9
      • 3.  Form: Option to Extend Term (Negotiated Clause)  6.10
    • B.  Establishing Fair Market Rent
      • 1.  Form: Establishing Fair Market Rent (Landlord’s Clause)  6.11
      • 2.  Form: Establishing Fair Market Rent (Tenant’s Clause)  6.12
      • 3.  Form: Establishing Fair Market Rent—“Baseball” Method (Negotiated Clause)  6.13
    • C.  Definition of Fair Market Rent
      • 1.  Form: Definition of Fair Market Rent (Landlord’s Clause)  6.14
      • 2.  Form: Definition of Fair Market Rent (Tenant’s Clause)  6.15

7

Cotenancy Requirements

Richard J. Kaiser

Matthew D. Olsan

  • I.  GENERAL CONSIDERATIONS  7.1
    • A.  Recent Trends Affecting Cotenancy Requirements  7.2
    • B.  Landlord’s Opposition to Cotenancy Requirements  7.3
  • II.  TYPES OF COTENANCY REQUIREMENTS  7.4
    • A.  Opening Cotenancy Requirements
      • 1.  Basis of Opening Cotenancy Requirements  7.5
        • a.  Square Footage  7.6
        • b.  Key Occupants and Replacement Occupants  7.7
          • (1)  Landlord’s Preferences  7.8
          • (2)  Tenant’s Preferences  7.9
        • c.  Alternative Rent  7.10
        • d.  Conditions to Tenant’s Exercise of Remedies  7.11
      • 2.  Landlord’s Right to Cure Opening Cotenancy Failure  7.12
      • 3.  Tenant’s Remedies on Opening Cotenancy Failure  7.13
        • a.  Delayed Opening  7.14
        • b.  Payment of Alternative Rent  7.15
        • c.  Termination of Lease  7.16
    • B.  Operating Cotenancy Requirements  7.17
      • 1.  Basis of Operating Cotenancy Requirements  7.18
      • 2.  Alternative Rent  7.19
      • 3.  Conditions to Tenant’s Exercise of Remedies  7.20
      • 4.  Landlord’s Right to Cure Operating Cotenancy Failure  7.21
      • 5.  Tenant’s Remedies on Operating Cotenancy Failure  7.22
        • a.  Rent Abatement  7.23
        • b.  Right to Close  7.24
        • c.  Termination of Lease  7.25
        • d.  Reimbursement of Unamortized Leasehold Improvement Costs  7.26
  • III.  DRAFTING LEASE CLAUSES
    • A.  Form: Cotenancy Requirements; Promotional Charges (Title of Article)  7.27
    • B.  Opening Cotenancy
      • 1.  Form: Opening Cotenancy (Tenant’s Clause)  7.28
      • 2.  Form: Opening Cotenancy (Negotiated Clause)  7.29
    • C.  Operating Cotenancy
      • 1.  Form: Operating Cotenancy (Tenant’s Clause)  7.30
      • 2.  Form: Operating Cotenancy (Negotiated Clause)  7.31

8

Early Termination Rights

Matthew P. Seeberger

Myra S. Mitzman

  • I.  GENERAL CONSIDERATIONS  8.1
    • A.  Opposition to Early Termination Rights  8.2
    • B.  Landlord versus Tenant Lease Forms  8.3
    • C.  Reasons for Early Termination
      • 1.  Tenant’s Failure to Achieve Specified Level of Gross Sales
        • a.  Tenant’s “Kick-Out” Rights  8.4
        • b.  Landlord’s “Kick-Out” Rights  8.5
      • 2.  Redevelopment or Remodeling of Shopping Center  8.6
      • 3.  Tenant’s Inability to Use Premises  8.7
      • 4.  Failure of Contingency
        • a.  Building Permit  8.8
        • b.  Governmental Approval to Operate  8.9
        • c.  Payment of Broker’s Commission on Failure of Contingency  8.10
        • d.  Delay in Substantial Completion of Premises  8.11
        • e.  Landlord’s Failure to Obtain Nondisturbance Agreement  8.12
      • 5.  Additional Termination Rights
        • a.  Landlord’s Rights  8.13
        • b.  Tenant’s Rights  8.14
      • 6.  Factors to Consider in Granting Termination Rights  8.15
  • II.  DRAFTING LEASE CLAUSES
    • A.  Inadequate Gross Sales
      • 1.  Form: Tenant’s Gross Sales Termination Right (Landlord’s Clause)  8.16
      • 2.  Form: Tenant’s Gross Sales Termination Right (Tenant’s Clause)  8.17
    • B.  Redevelopment or Remodeling of Shopping Center
      • 1.  Form: Redevelopment or Remodeling Termination Right (Landlord’s Clause)  8.18
      • 2.  Form: Redevelopment or Remodeling Termination Right (Negotiated Clause)  8.19
    • C.  Inability to Use Premises
      • 1.  Form: Termination for Failure to Obtain or Maintain Permits or Changes in Laws (Tenant’s Clause)  8.20
      • 2.  Form: Termination for Failure to Obtain or Maintain Permits or Changes in Laws (Negotiated Clause)  8.21

9

Minimum Rent and Additional Rent

Gary A. Glick

C. Gregg Ankenman

  • I.  GENERAL CONSIDERATIONS  9.1
    • A.  Minimum Rent  9.2
      • 1.  Type of Lease  9.3
      • 2.  Net and Gross Leases  9.4
      • 3.  Specific Minimum Rent Clauses
        • a.  Time of Payment  9.5
        • b.  Proration of Minimum Rent for Partial Month  9.6
        • c.  Increases in Minimum Rent  9.7
          • (1)  Fixed Percentage Increase  9.8
          • (2)  Consumer Price Index  9.9
          • (3)  Fair Market Rent Increases  9.10
        • d.  Free Rent  9.11
    • B.  Additional Rent  9.12
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Rent (Title of Article)  9.13
    • B.  Payment of Rent
      • 1.  Form: Payment of Rent (Landlord’s Clause)  9.14
      • 2.  Form: Payment of Rent (Tenant’s Clause)  9.15
    • C.  Minimum Rent
      • 1.  Form: Minimum Rent (Landlord’s Clause)  9.16
      • 2.  Form: Minimum Rent (Tenant’s Clause)  9.17
      • 3.  Form: Minimum Rent (Negotiated Clause)  9.18
    • D.  Form: Proration of Minimum and Additional Rent (Landlord’s and Tenant’s Clause)  9.19
    • E.  Minimum Rent Adjustment
      • 1.  Form: Minimum Rent Adjustment (Landlord’s Clause)  9.20
      • 2.  Form: Minimum Rent Adjustment (Tenant’s Clause)  9.21
    • F.  Form: Effect of Rent Control Ordinance (Landlord’s Clause)  9.22
    • G.  Form: Additional Rent (Landlord’s and Tenant’s Clause)  9.23

10

Late Payments

Robert J. Sykes

Carolyn V. Luong

  • I.  GENERAL CONSIDERATIONS  10.1
    • A.  Liquidated Damages  10.2
    • B.  Usury Considerations  10.3
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Late Payments (Landlord’s Clause)  10.4
    • B.  Form: Late Payments (Tenant’s Clause)  10.5
    • C.  Form: Late Payments (Negotiated Clause)  10.6

11

Percentage Rent

Robert J. Sykes

Hans D. Lauterbach

  • I.  GENERAL CONSIDERATIONS  11.1
    • A.  Calculation of Percentage Rent
      • 1.  Use of Break Points
        • a.  Natural Break Point  11.2
        • b.  Artificial Break Point  11.3
        • c.  Impact of Partial Calendar Year on Break Point  11.4
      • 2.  Factors That Impact Calculation  11.5
    • B.  Monthly or Annual Percentage Rent Obligation  11.6
    • C.  Reporting of Tenant’s Sales  11.7
    • D.  Record-Keeping and Audit Rights  11.8
    • E.  Percentage Rent Damages  11.9
  • II.  DRAFTING LEASE CLAUSES
    • A.  Definition, Calculation, and Payment of Percentage Rent
      • 1.  Form: Definition, Calculation, and Payment of Percentage Rent (Landlord’s Clause)  11.10
      • 2.  Form: Definition, Calculation, and Payment of Percentage Rent (Tenant’s Clause)  11.11
      • 3.  Form: Definition, Calculation, and Payment of Percentage Rent (Negotiated Clause)  11.12
    • B.  Gross Sales Definition
      • 1.  Form: Gross Sales Definition (Landlord’s Clause)  11.13
      • 2.  Form: Gross Sales Definition (Tenant’s Clause)  11.14
      • 3.  Form: Gross Sales Definition (Negotiated Clause)  11.15
    • C.  Maintenance of Records and Audit Rights
      • 1.  Form: Tenant’s Record-Keeping Obligations and Landlord’s Audit Rights (Landlord’s Clause)  11.16
      • 2.  Form: Tenant’s Record-Keeping Obligations and Landlord’s Audit Rights (Tenant’s Clause)  11.17
      • 3.  Form: Tenant’s Record-Keeping Obligations and Landlord’s Audit Rights (Negotiated Clause)  11.18
  • III.  FORM: MONTHLY SALES REPORT (LANDLORD’S EXHIBIT)  11.19

12

Real Property Taxes

Daniel J. Villalpando

Stephanie J. Shieh

Timothy S. Williams

  • I.  GENERAL CONSIDERATIONS  12.1
    • A.  Responsibility for Taxes and Assessments  12.2
    • B.  Proposition 13 Considerations  12.3
    • C.  Calculation of Tenant’s Share  12.4
    • D.  Manner of Payment  12.5
    • E.  Tax Contest  12.6
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Taxes and Utilities (Title of Article)  12.7
    • B.  Definition, Payment, and Calculation of Real Property Taxes
      • 1.  Form: Definition of Real Property Taxes (Landlord’s Clause)  12.8
      • 2.  Form: Definition of Real Property Taxes (Tenant’s Clause)  12.9
      • 3.  Form: Proposition 13 Change in Ownership (Landlord’s Clause)  12.10
      • 4.  Form: Proposition 13 Change in Ownership (Tenant’s Clause)  12.11
      • 5.  Form: Proposition 13 Change in Ownership (Negotiated Clause)  12.12
      • 6.  Form: Manner of Payment of Real Property Taxes (Landlord’s Clause)  12.13
      • 7.  Form: Manner of Payment of Real Property Taxes (Tenant’s Clause)  12.14
      • 8.  Form: Method of Calculating Tenant’s Share of Real Property Taxes (Landlord’s Clause)  12.15
      • 9.  Form: Method of Calculating Tenant’s Share of Real Property Taxes (Tenant’s Clause)  12.16
    • C.  Form: Taxes on Tenant’s Business Operations and Personal Property (Landlord’s and Tenant’s Clause)  12.17
    • D.  Contesting Real Property Taxes
      • 1.  Form: Contesting Real Property Taxes (Landlord’s Clause)  12.18
      • 2.  Form: Contesting Real Property Taxes (Tenant’s Clause)  12.19
      • 3.  Form: Contesting Real Property Taxes (Negotiated Clause)  12.20

13

Utilities

Stathi G. Marcopulos

James R. McCoy, Jr.

  • I.  GENERAL CONSIDERATIONS  13.1
    • A.  Separate Metering Versus Submetering  13.2
      • 1.  Advantages of Separate Metering to Tenant  13.3
      • 2.  Advantages of Submetering to Landlord  13.4
    • B.  Construction Planning  13.5
    • C.  Selection of Service Provider  13.6
  • II.  Impact of Electric Industry Deregulation  13.7
    • A.  Energy Use Benchmarking and Disclosure Requirements (AB 802 and Local Requirements)  13.7A
    • B.  Water and Sewerage Services  13.8
    • C.  Payment for Utility Services  13.9
    • D.  Interruption of Utility Service: Landlord’s Liability and Tenant’s Remedies  13.10
  • III.  DRAFTING LEASE CLAUSES
    • A.  Provision of Utilities
      • 1.  Form: Provision of Utility Services (Landlord’s Clause)  13.11
      • 2.  Form: Provision of Utility Services (Tenant’s Clause)  13.12
      • 3.  Form: Provision of Utility Services (Negotiated Clause)  13.13
    • B.  Interruption of Utility Services
      • 1.  Form: Interruption of Utility Services (Landlord’s Clause)  13.14
      • 2.  Form: Interruption of Utility Services (Tenant’s Clause)  13.15
      • 3.  Form: Interruption of Utility Services (Negotiated Clause)  13.16

14

Common Areas

Scott L. Grossfeld

Andréa D. Cohen

Neal A. Parish

  • I.  GENERAL CONSIDERATIONS  14.1
  • II.  ELECTRIC VEHICLE CHARGING STATIONS  14.1A
  • III.  DRAFTING LEASE CLAUSES
    • A.  Form: Common Areas (Title of Article)  14.2
    • B.  Defining Common Areas
      • 1.  Form: Definition of Common Areas (Landlord’s Clause)  14.3
      • 2.  Form: Definition of Common Areas (Tenant’s Clause)  14.4
    • C.  Nonexclusive Use of Common Areas
      • 1.  Form: Nonexclusive Use of Common Areas (Landlord’s Clause)  14.5
      • 2.  Form: Nonexclusive Use of Common Areas (Tenant’s Clause)  14.6
    • D.  Control of Common Areas
      • 1.  Form: Landlord’s Reservation of Exclusive Control of Common Areas (Landlord’s Clause)  14.7
      • 2.  Form: Control and Use of the Common Areas; Restriction on Changes (Tenant’s Clause)  14.8
    • E.  Maintenance of Common Areas
      • 1.  Form: Maintenance of Common Areas (Landlord’s Clause)  14.9
      • 2.  Form: Maintenance of Common Areas (Tenant’s Clause)  14.10
      • 3.  Form: Maintenance of Common Areas (Negotiated Clause)  14.11
    • F.  Parking Issues
      • 1.  Form: Parking (Landlord’s Clause)  14.12
      • 2.  Form: Parking (Tenant’s Clause)  14.13
      • 3.  Form: Parking (Negotiated Clause)  14.14
      • 4.  Form: Government Parking and Transportation Management Programs (Negotiated Clause)  14.15
      • 5.  Form: Electric Vehicle Charging Stations (Negotiated Clause)  14.16
      • 6.  Form: Exemption From Electric Vehicle Charging Station Statute (CC §1952.7) (Landlord’s Clause)  14.17
    • G.  Kiosk Protection
      • 1.  Form: Kiosk Protection (Tenant’s Clause)  14.18
      • 2.  Form: Kiosk Protection (Negotiated Clause)  14.19

15

Common Area Costs

Stathi G. Marcopulos

Gregory D. Call

Kevin D. Caton

  • I.  GENERAL CONSIDERATIONS  15.1
    • A.  Landlord and Tenant Positions  15.2
    • B.  Pool of Common Area Costs
      • 1.  Common Area Costs Versus Operating Costs  15.3
      • 2.  Definition of Common Area  15.4
    • C.  Management Fees/Administrative Fees/Salaries of Management Personnel
      • 1.  Landlord and Tenant Positions  15.5
      • 2.  Management Fees  15.6
      • 3.  Administrative Fees  15.7
      • 4.  Management Personnel Salaries  15.8
      • 5.  Other Exclusions and Limitations  15.9
        • a.  Taxes and Insurance  15.10
        • b.  Capital Expenditures; Original Construction Costs  15.11
        • c.  Insurance Premium Refunds; Excess Deductibles  15.12
        • d.  Costs Otherwise Reimbursed  15.13
    • D.  Allocation Fraction  15.14
      • 1.  Proration of Common Area Costs  15.15
      • 2.  Definition of Shopping Center  15.16
      • 3.  Leased or Leasable Space?  15.17
      • 4.  Exclusions and Contributions  15.18
      • 5.  Caps and Fixed CAM  15.19
        • a.  Caps  15.20
        • b.  Fixed CAM  15.21
    • E.  Procedural Clauses Regarding Common Area Costs
      • 1.  Payment of Common Area Costs  15.22
      • 2.  Audit Rights  15.23
        • a.  Time Limitation  15.24
        • b.  Confidentiality  15.25
        • c.  Requirement of No Default  15.26
        • d.  Auditor’s Qualifications and Compensation  15.27
        • e.  Cost of Audit  15.28
        • f.  Procedural Issues  15.29
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Definition of Common Area Costs (Landlord’s Clause)  15.30
    • B.  Form: Definition of Common Area Costs (Tenant’s Clause)  15.31
    • C.  Payment and Proration of Common Area Costs
      • 1.  Form: Payment and Proration of Common Area Costs (Landlord’s Clause)  15.32
      • 2.  Form: Payment and Proration of Common Area Costs (Tenant’s Clause)  15.33
      • 3.  Form: Cap on Tenant’s Share of Common Area Costs (Tenant’s Clause)  15.34
      • 4.  Form: Cap on Tenant’s Share of Common Area Costs (Negotiated Clause)  15.35
      • 5.  Form: Tenant’s Audit Rights (Tenant’s Clause)  15.36

16

Use and Trade Names

Scott L. Grossfeld

Carolyn J. Stein

  • I.  GENERAL CONSIDERATIONS  16.1
    • A.  Permitted Uses  16.2
      • 1.  Landlord’s Considerations
        • a.  Landlord’s Desire to Control Character and Quality of Shopping Center  16.3
        • b.  Landlord’s Need to Manage Parking; Compliance With Local Parking/Zoning Requirements  16.4
        • c.  Landlord’s Desire to Maximize Rent  16.5
        • d.  Interaction of Use Restrictions and Landlord Remedies  16.6
      • 2.  Tenant’s Considerations  16.7
        • a.  Tenant’s Need to Evolve  16.8
        • b.  Tenant’s Need to Modify or Expand Use of Multiple Stores  16.9
        • c.  Tenant’s Desire for Effective Exit Strategy  16.10
      • 3.  Balancing Landlord’s and Tenant’s Interests
        • a.  Typical Outcome  16.11
        • b.  Incidental Uses  16.12
      • 4.  Enforceability of Use Restrictions  16.13
    • B.  Prohibited Uses and Activities  16.14
      • 1.  Landlord’s Considerations  16.15
      • 2.  Tenant’s Considerations  16.16
    • C.  Other Use Covenants  16.17
    • D.  Trade and Brand Names  16.18
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Tenant’s Conduct of Its Business (Title of Article)  16.19
    • B.  Permitted Use Clauses
      • 1.  Form: Permitted Use (Landlord’s Clause)  16.20
      • 2.  Form: Permitted Use (Tenant’s Clause)  16.21
      • 3.  Form: Permitted Use (Negotiated Clause)  16.22
    • C.  Prohibited Uses
      • 1.  Form: Use Restrictions (Landlord’s Clause)  16.23
      • 2.  Form: Use Restrictions (Tenant’s Clause)  16.24
      • 3.  Form: Use Restrictions (Negotiated Clause)  16.25
    • D.  Trade Name
      • 1.  Form: Tenant’s Trade Name (Landlord’s Clause)  16.26
      • 2.  Form: Tenant’s Trade Name (Tenant’s Clause)  16.27
      • 3.  Form: Tenant’s Trade Name (Negotiated Clause)  16.28
  • III.  FORM: PROHIBITED USES EXHIBIT (LANDLORD’S AND TENANT’S EXHIBIT)  16.29

17

Opening/Operating Covenants, Go Dark Clauses, and Hours of Operation

Richard J. Kaiser

C. Gregg Ankenman

  • I.  GENERAL CONSIDERATIONS  17.1
    • A.  Covenants to Open and Operate
      • 1.  Scope of Covenants  17.2
      • 2.  Landlord’s Versus Tenant’s Concerns
        • a.  Landlord’s Concerns  17.3
        • b.  Tenant’s Concerns  17.4
      • 3.  Express Versus Implied Operating Covenants
        • a.  Express Covenants
          • (1)  Scope of Express Covenants  17.5
          • (2)  Enforceability of Express Covenants; Remedies  17.6
        • b.  Implied Covenants  17.7
    • B.  Recapture (Go Dark) Clauses
      • 1.  Scope and Enforceability  17.8
      • 2.  Negotiating Concerns  17.9
        • a.  Notice of Cessation  17.10
        • b.  Permitted Closure Exception  17.11
      • 3.  Factors to Consider in Terminating Lease  17.12
        • a.  Time to Terminate  17.13
        • b.  Nullification of Termination Notice  17.14
      • 4.  Reimbursement of Costs
        • a.  Unamortized Tenant Improvement Allowance; Broker Commissions  17.15
        • b.  Fair Market Value of Tenant’s Leasehold Interest  17.16
      • 5.  Conditions to Recapture Rights  17.17
    • C.  Hours of Operation
      • 1.  Competing Interests  17.18
      • 2.  Extended Hours of Operation
        • a.  Tenant’s Needs  17.19
        • b.  Landlord’s Requirements  17.20
      • 3.  Liquidated Damages  17.21
  • II.  DRAFTING LEASE CLAUSES
    • A.  Covenants to Open and Operate
      • 1.  Form: Covenant to Open and Operate (Landlord’s Clause)  17.22
      • 2.  Form: Covenant to Open (Tenant’s Clause)  17.23
      • 3.  Form: Covenant to Open and Operate (Negotiated Clause)  17.24
    • B.  Exceptions to Operating Covenants
      • 1.  Form: Exception for Key Occupant Closures (Negotiated Clause)  17.25
      • 2.  Form: Exception for Inventory (Negotiated Clause)  17.26
    • C.  Recapture Rights
      • 1.  Form: Landlord’s Recapture Right (Landlord’s Clause)  17.27
      • 2.  Form: Landlord’s Recapture Right (Tenant’s Clause)  17.28
      • 3.  Form: Landlord’s Recapture Right (Negotiated Clause)  17.29
    • D.  Delayed Opening
      • 1.  Grand Opening Delay (Landlord’s and Negotiated Clause)  17.30
      • 2.  Form: Delayed Opening Rent (Landlord’s Clause)  17.31
      • 3.  Form: Delayed Opening Rent (Negotiated Clause)  17.32
    • E.  Hours of Operation
      • 1.  Form: Hours of Operation (Landlord’s Clause)  17.33
      • 2.  Form: Hours of Operation (Tenant’s Clause)  17.34
      • 3.  Form: Hours of Operation (Negotiated Clause)  17.35

18

Compliance With Laws

Scott L. Grossfeld

Stephanie J. Shieh

Matthew D. Olsan

  • I.  GENERAL CONSIDERATIONS
    • A.  Default Allocation of Risk  18.1
    • B.  When Lease Silent on Compliance-With-Laws Responsibility  18.2
    • C.  Compliance With Laws Affecting the Common Areas  18.3
    • D.  Negotiated Allocation of Risk  18.4
  • II.  DRAFTING LEASE CLAUSES
    • A.  Compliance With Laws Affecting the Premises
      • 1.  Form: Compliance With Laws—Premises (Landlord’s Clause)  18.5
      • 2.  Form: Compliance With Laws—Premises (Tenant’s Clause)  18.6
      • 3.  Form: Compliance With Laws—Premises (Negotiated Clause)  18.7
    • B.  Compliance With Laws Affecting the Common Areas
      • 1.  Form: Compliance With Laws—Common Areas (Landlord’s Clause)  18.8
      • 2.  Form: Compliance With Laws—Common Areas (Tenant’s Clause)  18.9
      • 3.  Form: Compliance With Laws—Common Areas (Negotiated Clause)  18.10
    • C.  Form: Compliance With Laws—General (Negotiated Clause)  18.11

19

Exclusive Use and Radius Restrictions

Gary A. Glick

Carolyn J. Stein

Elizabeth Clark

  • I.  GENERAL CONSIDERATIONS
    • A.  Exclusive Use Restrictions  19.1
      • 1.  Key Issues in Negotiating Exclusive Use Provision  19.2
        • a.  Definition of Exclusive Uses  19.3
        • b.  Drafting Exclusive Provisions  19.3A
        • c.  Occupants Exempted From Use Prohibitions  19.4
          • (1)  Existing Occupants  19.5
          • (2)  Certain Major Tenants  19.6
          • (3)  Small Shop Tenants  19.7
        • d.  Balancing the Rights of Major Tenants  19.8
        • e.  Scope of Landlord’s Obligation  19.9
        • f.  Tenant’s Remedies for Violation  19.10
        • g.  Conditions and Termination  19.11
      • 2.  Antitrust Concerns  19.12
    • B.  Radius Restrictions  19.13
      • 1.  Reasonable Distance  19.14
      • 2.  Rule of Reason  19.15
      • 3.  Landlord’s Remedies  19.16
      • 4.  Other Drafting Issues  19.17
        • a.  Measurement of Radius  19.18
        • b.  Duration of Restrictive Covenants  19.19
        • c.  Relationship of Tenant to Owners of Competing Business  19.20
        • d.  Clear Definition of Restricted Activities  19.21
  • II.  DRAFTING LEASE CLAUSES
    • A.  Exclusive Use Restrictions
      • 1.  Exclusive Use
        • a.  Form: Exclusive Use (Landlord’s Clause)  19.22
        • b.  Form: Exclusive Use (Tenant’s Clause)  19.23
        • c.  Form: Exclusive Use (Negotiated Clause)  19.24
      • 2.  Tenant’s Remedies
        • a.  Form: Tenant’s Remedies (Landlord’s Clause)  19.25
        • b.  Form: Tenant’s Remedies (Tenant’s Clause)  19.26
        • c.  Form: Tenant’s Remedies (Negotiated Clause)  19.27
      • 3.  Conditions and Termination of Exclusive Use Right
        • a.  Form: Conditions of Exclusive Use Right (Landlord’s Clause)  19.28
        • b.  Form: Termination of Exclusive Use Right (Landlord’s Clause)  19.29
      • 4.  Form: Antitrust Indemnification (Landlord’s Clause)  19.30
      • 5.  Form: Antitrust Indemnification (Negotiated Clause)  19.31
    • B.  Covenant Against Competition
      • 1.  Radius Restrictions
        • a.  Form: Radius Restriction (Landlord’s Clause)  19.32
        • b.  Form: Radius Restriction (Negotiated Clause)  19.33
      • 2.  Landlord’s Remedies
        • a.  Form: Landlord’s Remedies (Landlord’s Clause)  19.34
        • b.  Form: Landlord’s Remedies (Negotiated Clause)  19.35

20

Maintenance of Premises

Matthew P. Seeberger

Neal A. Parish

  • I.  GENERAL CONSIDERATIONS
    • A.  Purpose  20.1
    • B.  Parties’ Objectives  20.2
    • C.  Legal Framework  20.3
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Repairs and Maintenance (Title of Article)  20.4
    • B.  Landlord’s Repair and Maintenance Obligations
      • 1.  Form: Landlord’s Repair and Maintenance Obligations (Landlord’s Clause)  20.5
      • 2.  Form: Landlord’s Repair and Maintenance Obligations (Tenant’s Clause)  20.6
      • 3.  Form: Landlord’s Repair and Maintenance Obligations (Negotiated Clause)  20.7
      • 4.  Form: Tenant’s Self-Help Right (Tenant’s and Negotiated Clause)  20.8
    • C.  Tenant’s Repair and Maintenance Obligations
      • 1.  Form: Tenant’s Repair and Maintenance Obligations (Landlord’s Clause)  20.9
      • 2.  Form: Tenant’s Repair and Maintenance Obligations (Tenant’s Clause)  20.10
      • 3.  Form: Tenant’s Repair and Maintenance Obligations (Negotiated Clause)  20.11
      • 4.  Form: Landlord’s Self-Help Right (Landlord’s and Negotiated Clause)  20.12
    • D.  Other Repair and Maintenance Clauses
      • 1.  Trash Removal; Recycling
        • a.  Form: Trash Removal; Recycling (Landlord’s Clause)  20.13
        • b.  Form: Trash Removal; Recycling (Tenant’s Clause)  20.14
        • c.  Form: Trash Removal; Recycling (Negotiated Clause)  20.15
      • 2.  Pest Control
        • a.  Form: Pest Control (Landlord’s Clause)  20.16
        • b.  Form: Pest Control (Tenant’s Clause)  20.17
        • c.  Form: Pest Control (Negotiated Clause)  20.18
      • 3.  Odor and Noise Control
        • a.  Form: Odor and Noise Control (Landlord’s Clause)  20.19
        • b.  Form: Odor and Noise Control (Tenant’s Clause)  20.20
        • c.  Form: Odor and Noise Control (Negotiated Clause)  20.21

21

Alterations, Additions, Trade Fixtures, and Personal Property

Stephanie J. Shieh

Rebecca L. Powlan

  • I.  GENERAL CONSIDERATIONS
    • A.  Alterations and Additions
      • 1.  Legal Framework  21.1
      • 2.  Tenant’s Concerns
        • a.  Flexibility  21.2
        • b.  Limitations on Obligations  21.3
        • c.  Ownership of Alterations and Additions  21.4
      • 3.  Landlord’s Concerns
        • a.  Adequate Controls  21.5
          • (1)  Right to Review and Approve Alterations and Additions  21.6
          • (2)  Limitations on Types of Alterations and Additions  21.7
          • (3)  Limitations Based on Cost of Constructing or Removing Alterations and Additions  21.8
        • b.  Tenant’s Obligations  21.9
        • c.  Landlord’s Approval Rights Over Plans and Work  21.10
        • d.  Mechanics Liens  21.11
        • e.  Removal of Alterations and Additions  21.12
        • f.  Ownership of Alterations and Additions  21.13
        • g.  Insuring Alterations and Additions  21.14
    • B.  Trade Fixtures and Other Personal Property
      • 1.  Legal Framework
        • a.  Definitions  21.15
        • b.  Ways to Differentiate Fixtures, Trade Fixtures, and Other Personal Property
          • (1)  Right to Remove  21.16
          • (2)  Rights of Third Parties  21.17
      • 2.  Landlord’s and Tenant’s Concerns  21.18
  • II.  DRAFTING LEASE CLAUSES
    • A.  Alterations and Additions
      • 1.  Form: Tenant’s Construction of Alterations (Landlord’s Clause)  21.19
      • 2.  Form: Tenant’s Construction of Alterations (Tenant’s Clause)  21.20
      • 3.  Form: Tenant’s Construction of Alterations (Negotiated Clause)  21.21
    • B.  Trade Fixtures and Personal Property  21.22
      • 1.  Form: Tenant’s Right to Install Trade Fixtures and Personal Property (Landlord’s Clause)  21.23
      • 2.  Form: Tenant’s Right to Install Trade Fixtures and Personal Property (Tenant’s Clause)  21.24
      • 3.  Form: Financing Personal Property (Landlord’s Clause)  21.25
      • 4.  Form: Financing Personal Property (Tenant’s Clause)  21.26

22

Signage

Stephanie J. Shieh

Daniel B. Myers

  • I.  GENERAL CONSIDERATIONS  22.1
  • II.  DRAFT LEASE CLAUSES
    • A.  Form: Signage (Title of Article)  22.2
    • B.  Form: General Prohibition (Landlord’s Clause)  22.3
    • C.  Form: Initial Signage (Tenant’s Clause)  22.4
    • D.  Form: Interior Signs (Landlord’s and Tenant’s Clause)  22.5
    • E.  Form: Exterior Premises Sign (Landlord’s and Tenant’s Clause)  22.6
    • F.  Form: Future Signage (Tenant’s Clause)  22.7
    • G.  Form: Pylon and Monument Signage (Tenant’s and Negotiated Clause)  22.8
    • H.  Form: Temporary Signage (Tenant’s and Negotiated Clause)  22.9

23

Insurance, Exculpation, and Indemnification

Jeffrey D. Masters

Matthew P. Seeberger

  • I.  GENERAL CONSIDERATIONS
    • A.  Increasing Importance of Clauses  23.1
    • B.  Risk Management and Allocation  23.2
    • C.  Coordination With Other Lease Clauses  23.3
  • II.  INSURANCE
    • A.  Liability Insurance  23.4
      • 1.  Commercial General Liability Insurance
        • a.  Standard Coverage  23.5
        • b.  Separately Defined Coverages
          • (1)  Products-Completed Operations Hazard Coverage  23.6
          • (2)  Contractual Liability Coverage  23.7
          • (3)  Miscellaneous Liability Coverages  23.8
      • 2.  Severability of Interests  23.9
      • 3.  Policy Limits  23.10
      • 4.  Additional Insureds  23.11
        • a.  Form of Additional Insured Endorsement  23.12
        • b.  Primary Insurance Endorsement  23.13
    • B.  Workers’ Compensation Insurance  23.14
    • C.  Property Insurance  23.15
      • 1.  Direct Damage Coverage  23.16
        • a.  Amount of Coverage
          • (1)  Actual Cash Value  23.17
          • (2)  Replacement Cost  23.18
        • b.  Coinsurance  23.19
        • c.  Inflation Endorsement  23.20
      • 2.  Time Element Coverage  23.21
    • D.  Additional First Party Insurance Coverage  23.22
    • E.  Evidence of Insurance  23.23
    • F.  Deductibles  23.24
    • G.  Self-Insurance  23.25
    • H.  Enforcement of Insurance Clauses  23.26
    • I.  Consultation With Client’s Risk Manager  23.27
  • III.  EXCULPATION AND INDEMNIFICATION
    • A.  Exculpation  23.28
      • 1.  Adhesion Contract of Exculpation Is Unenforceable  23.29
      • 2.  General Exculpation Clause Does Not Cover Landlord’s Active Negligence  23.30
      • 3.  Specific, Nonadhesive Exculpation for Active Negligence Should Be Enforceable  23.31
      • 4.  Strict Liability  23.32
      • 5.  Survival; Date of Loss; Tail Coverage  23.33
    • B.  Indemnification  23.34
      • 1.  Attorney Fees  23.35
      • 2.  Waiver of Subrogation  23.36
  • IV.  DRAFTING LEASE CLAUSES
    • A.  Form: Insurance (Title of Article)  23.37
    • B.  Tenant’s Insurance Requirements
      • 1.  Insurance Coverages
        • a.  Form: Tenant’s Insurance (Landlord’s Clause)  23.38
        • b.  Form: Parties’ Insurance (Tenant’s Clause)  23.39
      • 2.  Commercial General Liability Insurance
        • a.  Form: Commercial General Liability Insurance (Landlord’s Clause)  23.40
        • b.  Form: Commercial General Liability Insurance (Tenant’s Clause)  23.41
        • c.  Form: Commercial General Liability Insurance (Negotiated Clause)  23.42
        • d.  Form: Broad Form Coverage (Landlord’s and Tenant’s Clause)  23.43
      • 3.  Form: Tenant’s Workers’ Compensation and Employer Liability Coverage (Landlord’s Clause)  23.44
      • 4.  Form: Business Income Insurance (Landlord’s Clause)  23.45
      • 5.  Form: Plate-Glass Insurance (Landlord’s Clause)  23.46
        • a.  Form: Tenant’s Property Insurance (Landlord’s Clause)  23.47
        • b.  Form: Construction Insurance (Landlord’s Clause)  23.48
    • C.  Policy Form
      • 1.  Form: Policy Form (Landlord’s and Tenant’s Clause)  23.49
      • 2.  Additional Insureds; Loss Payees
        • a.  Form: Additional Insureds; Loss Payees (Landlord’s Clause)  23.50
        • b.  Form: Additional Insureds; Loss Payees (Tenant’s and Negotiated Clause)  23.51
      • 3.  Delivery of Certificates and Policies
        • a.  Form: Delivery of Certificates and Policies (Landlord’s Clause)  23.52
        • b.  Form: Delivery of Certificates (Tenant’s Clause)  23.53
        • c.  Form: Delivery of Certificates and Policies (Negotiated Clause)  23.54
      • 4.  Primary Insurance Endorsements for Additional Insureds
        • a.  Form: Primary Insurance Endorsements for Additional Insureds (Landlord’s Clause)  23.55
        • b.  Form: Primary Insurance Endorsements for Additional Insureds (Tenant’s Clause)  23.56
      • 5.  Form: Deductibles (Landlord’s and Tenant’s Clause)  23.57
    • D.  Blanket and Self-Insurance
      • 1.  Form: Blanket Policies (Landlord’s Clause)  23.58
      • 2.  Form: Blanket Policies; Self-Insurance (Tenant’s Clause)  23.59
    • E.  Landlord’s Property Insurance
      • 1.  Form: Landlord’s Property Insurance (Landlord’s Clause)  23.60
      • 2.  Form: Landlord’s Property Insurance (Tenant’s Clause)  23.61
      • 3.  Form: Landlord’s Property Insurance (Negotiated Clause)  23.62
      • 4.  Reimbursement of Insurance Premiums
        • a.  Form: Reimbursement of Insurance Premiums; Increased Premiums (Landlord’s Clause)  23.63
        • b.  Form: Reimbursement of Insurance Premiums (Tenant’s Clause)  23.64
        • c.  Form: Reimbursement of Insurance Premiums; Increased Premiums Due to Use of Premises (Negotiated Clause)  23.65
    • F.  Exculpation
      • 1.  Exculpation
        • a.  Form: Exculpation (Landlord’s Clause)  23.66
        • b.  Form: Exculpation (Negotiated Clause)  23.67
      • 2.  Survival of Exculpation
        • a.  Form: Survival of Exculpation (Landlord’s Clause)  23.68
        • b.  Form: Survival of Exculpation (Negotiated Clause)  23.69
    • G.  Indemnification
      • 1.  Tenant’s Indemnification of Landlord
        • a.  Form: Tenant’s Indemnification of Landlord (Landlord’s Clause)  23.70
        • b.  Form: Tenant’s Indemnification of Landlord (Tenant’s Clause)  23.71
        • c.  Form: Tenant’s Indemnification of Landlord (Negotiated Clause)  23.72
      • 2.  Landlord’s Indemnification of Tenant
        • a.  Form: Landlord’s Indemnification of Tenant (Tenant’s Clause)  23.73
        • b.  Form: Landlord’s Indemnification of Tenant (Negotiated Clause)  23.74
    • H.  Waiver of Subrogation
      • 1.  Form: Waiver of Subrogation (Landlord’s Clause)  23.75
      • 2.  Form: Waiver of Subrogation (Tenant’s Clause)  23.76
      • 3.  Form: Waiver of Subrogation (Negotiated Clause)  23.77
    • I.  Additional Landlord Clauses
      • 1.  Form: Tenant’s Failure to Maintain Insurance (Landlord’s Clause)  23.78
      • 2.  Form: Sufficiency of Coverage (Landlord’s Clause)  23.79

24

Damage and Destruction

Hans D. Lauterbach

  • I.  GENERAL CONSIDERATIONS
    • A.  Importance of Damage and Destruction Clause to Retail Landlords and Tenants  24.1
    • B.  Governing Statutes  24.2
    • C.  Interaction With Other Lease Clauses  24.3
    • D.  Parties’ Insurance Obligations  24.4
    • E.  Distribution of Proceeds From Tenant’s Insurance  24.5
    • F.  Factors Affecting Landlord’s Obligation to Rebuild and Termination Rights  24.6
      • 1.  Uninsured Casualty  24.7
      • 2.  Sufficiency of Insurance Proceeds  24.8
      • 3.  Building Permits and Other Approvals  24.9
      • 4.  Casualty Caused by Tenant’s Negligence or Willful Misconduct  24.10
      • 5.  Requirement That Insurance Proceeds Be Used to Offset Loan  24.11
      • 6.  Casualty Near End of Lease Term  24.12
        • a.  Landlord’s Perspective  24.13
        • b.  Tenant’s Perspective  24.14
        • c.  Threshold Damage Tests  24.15
      • 7.  Damage to Rest of Shopping Center
        • a.  Landlord’s Right to Terminate Lease  24.16
        • b.  Importance of Center’s Original Size  24.17
      • 8.  CALGreen Compliance Considerations  24.17A
    • G.  Abatement of Rent Following Damage or Destruction  24.18
      • 1.  Business Interruption Insurance  24.19
      • 2.  Limiting Abatement to Rental Loss Insurance Proceeds  24.20
      • 3.  Rent Items Abated  24.21
      • 4.  Partial Abatement  24.22
      • 5.  Damage or Destruction Outside the Premises  24.23
      • 6.  Length of Abatement Period  24.24
      • 7.  Damage or Destruction Caused by Tenant  24.25
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Damage and Destruction (Title of Article)  24.26
    • B.  Form: Waiver of Statutory Termination Rights (Landlord’s and Tenant’s Clause)  24.27
    • C.  Restoration Obligations and Termination Rights
      • 1.  Form: Restoration Obligations and Termination Rights (Landlord’s Clause)  24.28
      • 2.  Form: Restoration Obligations and Termination Rights (Tenant’s Clause)  24.29
      • 3.  Form: Restoration Obligations and Termination Rights (Negotiated Clause)  24.30
      • 4.  Form: Restoration Using Revised Plans and Specifications (Negotiated Clause)  24.31
    • D.  Damage Near End of Term
      • 1.  Form: Damage Near End of Term (Landlord’s Clause)  24.32
      • 2.  Form: Damage Near End of Term (Tenant’s Clause)  24.33
      • 3.  Form: Damage Near End of Term (Negotiated Clause)  24.34
    • E.  Damage to Remainder of Shopping Center
      • 1.  Form: Damage to Remainder of Shopping Center (Landlord’s Clause)  24.35
      • 2.  Form: Damage to Remainder of Shopping Center (Tenant’s Clause)  24.36
      • 3.  Form: Damage to Remainder of Shopping Center (Negotiated Clause)  24.37
      • 4.  Form: Damage to Remainder of Shopping Center—Tenant’s Right of First Negotiation for Redeveloped Space (Negotiated Clause)  24.38
    • F.  Distribution of Proceeds
      • 1.  Form: Distribution of Proceeds (Landlord’s Clause)  24.39
      • 2.  Form: Distribution of Proceeds (Tenant’s Clause)  24.40
      • 3.  Form: Distribution of Proceeds (Negotiated Clause)  24.41
    • G.  Abatement
      • 1.  Form: Rent Abatement (Landlord’s Clause)  24.42
      • 2.  Form: Rent Abatement (Tenant’s Clause)  24.43
      • 3.  Form: Rent Abatement (Negotiated Clause)  24.44

25

Condemnation

Carolyn V. Luong

  • I.  GENERAL CONSIDERATIONS
    • A.  Likelihood of Condemnation  25.1
    • B.  Parties’ Concerns and Objectives  25.2
    • C.  Constitutional and Statutory Framework  25.3
    • D.  Tenant’s Compensation in Absence of Express Lease Clause  25.4
      • 1.  Value of Improvements  25.5
      • 2.  Bonus Value  25.6
      • 3.  Goodwill  25.7
      • 4.  Relocation Costs  25.8
    • E.  Negotiating Definition of Condemnation  25.9
    • F.  Whether to Address Temporary Taking  25.10
    • G.  Negotiating Partial or Total Termination of Lease  25.11
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Condemnation (Title of Article)  25.12
    • B.  Form: Definition of Taking (Landlord’s and Tenant’s Clause)  25.13
    • C.  Form: Total Taking (Landlord’s and Tenant’s Clause)  25.14
    • D.  Partial Taking
      • 1.  Form: Partial Taking (Landlord’s Clause)  25.15
      • 2.  Form: Partial Taking (Tenant’s Clause)  25.16
      • 3.  Form: Partial Taking (Negotiated Clause)  25.17
    • E.  Allocation of Condemnation Award
      • 1.  Form: Allocation of Condemnation Award (Landlord’s Clause)  25.18
      • 2.  Form: Allocation of Condemnation Award (Tenant’s Clause)  25.19
      • 3.  Form: Allocation of Condemnation Award (Negotiated Clause)  25.20
    • F.  Continuation of Lease
      • 1.  Form: Continuation of Lease (Landlord’s Clause)  25.21
      • 2.  Form: Continuation of Lease (Tenant’s Clause)  25.22
      • 3.  Form: Continuation of Lease (Negotiated Clause)  25.23
    • G.  Waiver of Statutory Right to Terminate
      • 1.  Form: Waiver of Statutory Right to Terminate (Landlord’s Clause)  25.24
      • 2.  Form: Waiver of Statutory Right to Terminate (Negotiated Clause)  25.25

26

Assignment and Subletting

Robert J. Sykes

Hans D. Lauterbach

  • I.  GENERAL CONSIDERATIONS  26.1
    • A.  Assignment or Sublet?  26.2
    • B.  Issues Unique to Retail Leases  26.3
    • C.  Statutory Framework
      • 1.  Basic Rules on Transfer of Commercial Leases  26.4
      • 2.  Impact on Remedies  26.5
  • II.  DRAFTING CONSIDERATIONS
    • A.  Definition of Transfer  26.6
    • B.  Right to Withhold Consent to Transfer  26.7
      • 1.  Need for Written Statement  26.8
      • 2.  Ambiguities  26.9
    • C.  Permitted Transfers  26.10
      • 1.  Affiliates  26.11
      • 2.  Stock Transfers, Mergers, and Consolidations  26.12
      • 3.  Sale of Business  26.13
      • 4.  Transfer to Franchisee  26.14
    • D.  Evaluation of Request to Transfer  26.15
    • E.  Landlord’s Rights Following Request to Transfer
      • 1.  Recapture  26.16
        • a.  Tenant’s Attempts to Limit Recapture  26.17
        • b.  Nullification Rights  26.18
      • 2.  Reimbursement for Tenant’s Improvements  26.19
      • 3.  Transfer Premium or Bonus Rent  26.20
        • a.  Mechanisms for Collecting Bonus Rent  26.21
        • b.  Shared Transfer Premium  26.22
      • 4.  Increase Minimum Rent to Fair Market Rent  26.23
    • F.  Release, Indemnity, and Cure Rights
      • 1.  Release of Tenant  26.24
      • 2.  Indemnity of Tenant  26.25
      • 3.  Tenant’s Cure Rights  26.26
    • G.  Landlord’s Recognition of Subtenant  26.27
    • H.  Transfers Without Landlord’s Consent  26.28
  • III.  DRAFTING LEASE CLAUSES
    • A.  Form: Assignment and Subletting (Title of Article)  26.29
    • B.  Definition of Assignment; Standard of Consent; Restrictions on Transfer
      • 1.  Form: Assignment; Consent Required (Landlord’s Clause)  26.30
      • 2.  Form: Assignment (Tenant’s Clause)  26.31
      • 3.  Form: Standard for Consent (Landlord’s Clause)  26.32
    • C.  Transfer Procedure
      • 1.  Form: Tenant’s Request (Landlord’s Clause)  26.33
      • 2.  Form: Tenant’s Request (Negotiated Clause)  26.34
      • 3.  Form: Landlord’s Response (Landlord’s Clause)  26.35
      • 4.  Form: Landlord’s Response (Negotiated Clause)  26.36
      • 5.  Form: Recapture Limited to Material Change in Use (Negotiated Clause)  26.37
      • 6.  Form: Nullification of Recapture (Negotiated Clause)  26.38
      • 7.  Form: Transfers to Affiliates (Landlord’s Clause)  26.39
      • 8.  Form: Stock Transfers, Mergers, and Consolidations (Negotiated Clause)  26.40
      • 9.  Form: Sale of Tenant’s Business (Negotiated Clause)  26.41
      • 10.  Form: Transfer to Franchisee (Negotiated Clause)  26.42
      • 11.  Form: License and Concession Agreements (Negotiated Clause)  26.43
    • D.  Transfer Premium; Fair Market Rent
      • 1.  Form: Transfer Premium; Fair Market Rent (Landlord’s Clause)  26.44
      • 2.  Form: Shared Transfer Premium (Negotiated Clause)  26.45
    • E.  Form: Tenant’s Remedies (Landlord’s Clause)  26.46
    • F.  Release Provisions
      • 1.  Form: Nonrelease (Landlord’s Clause)  26.47
      • 2.  Form: Release (Negotiated Clause)  26.48
    • G.  Form: Form and Content of Transfer Instrument (Landlord’s Clause)  26.49
    • H.  Recognition Provisions
      • 1.  Form: Recognition (Landlord’s Clause)  26.50
      • 2.  Form: Recognition (Tenant’s Clause)  26.51
      • 3.  Form: Recognition (Negotiated Clause)  26.52
    • I.  Form: Reimbursement by Tenant (Landlord’s Clause)  26.53

27

Default and Remedies

Gary A. Glick

Estelle M. Braaf

Carolyn J. Stein

  • I.  GENERAL CONSIDERATIONS  27.1
    • A.  Purposes of Default and Remedy Clauses  27.2
    • B.  Default Notice  27.3
  • II.  TENANT’S DEFAULT
    • A.  Statutory Notice Requirements (CCP §§1161–1162)  27.4
      • 1.  Cure Period  27.5
      • 2.  Service of Notice  27.6
    • B.  Events of Default  27.7
      • 1.  Monetary Defaults  27.8
      • 2.  Nonmonetary Defaults  27.9
      • 3.  Tenant Bankruptcy  27.10
    • C.  Landlord’s Remedies
      • 1.  Statutory Remedies  27.11
        • a.  Termination of Lease  27.12
        • b.  Damages
          • (1)  Damages Recoverable  27.13
          • (2)  Mitigation of Damages  27.14
          • (3)  Application of Security Deposit to Damages  27.15
          • (4)  Negotiated Modifications to Damages Remedy  27.16
        • c.  Effect of Abandonment
          • (1)  Lease Termination (CC §1951.2)  27.17
          • (2)  Continuing the Lease (CC §1951.4)  27.18
          • (3)  Choice of Remedies  27.19
      • 2.  Common Law Remedies  27.20
      • 3.  Reentry Clauses; Self-Help Remedies
        • a.  Reentry Clause  27.21
        • b.  Right to Cure and Reimbursement  27.22
  • III.  LANDLORD’S DEFAULT
    • A.  Addressed in Modern Commercial Lease  27.23
    • B.  Tenant’s Remedies
      • 1.  Termination of Lease  27.24
      • 2.  Self-Help  27.25
        • a.  Maintenance Obligations  27.26
        • b.  Other Obligations  27.27
      • 3.  Reimbursement and Offset Rights  27.28
      • 4.  Other Remedies  27.29
  • IV.  WAIVERS  27.30
  • V.  DRAFTING LEASE CLAUSES
    • A.  Tenant’s Default and Landlord’s Remedies
      • 1.  Form: Defaults by Tenant (Title of Article)  27.31
      • 2.  Tenant’s Default Defined
        • a.  Form: Tenant’s Default (Landlord’s Clause)  27.32
        • b.  Form: Tenant’s Default (Tenant’s Clause)  27.33
        • c.  Form: Tenant’s Default (Negotiated Clause)  27.34
      • 3.  Landlord’s Remedies
        • a.  Form: Landlord’s Remedies (Landlord’s Clause)  27.35
        • b.  Form: Landlord’s Remedies (Tenant’s Clause)  27.36
        • c.  Form: Landlord’s Remedies (Negotiated Clause)  27.37
      • 4.  Landlord’s Self-Help Remedies
        • a.  Form: Right of Landlord to Perform (Landlord’s Clause)  27.38
        • b.  Form: Right of Landlord to Perform (Tenant’s Clause)  27.39
        • c.  Form: Right of Landlord to Perform (Negotiated Clause)  27.40
      • 5.  Form: Definition of Rent (Landlord’s and Negotiated Clause)  27.41
      • 6.  Redemption
        • a.  Form: Waiver of Redemption (Landlord’s Clause)  27.42
        • b.  Form: Right of Redemption (Tenant’s Clause)  27.43
      • 7.  Landlord’s Lien Waiver
        • a.  Form: Lien Waiver (Tenant’s Clause)  27.44
        • b.  Form: Tenant Financing (Negotiated Clause)  27.45
    • B.  Landlord’s Default and Tenant’s Remedies
      • 1.  Form: Defaults by Landlord (Title of Article)  27.46
      • 2.  Landlord’s Default Defined
        • a.  Form: Landlord’s Default (Landlord’s Clause)  27.47
        • b.  Form: Landlord’s Default (Tenant’s Clause)  27.48
        • c.  Form: Landlord’s Default (Negotiated Clause)  27.49
      • 3.  Tenant’s Remedies
        • a.  Form: Tenant’s Remedies (Landlord’s Clause)  27.50
        • b.  Form: Tenant’s Remedies (Tenant’s Clause)  27.51
        • c.  Form: Tenant’s Remedies (Negotiated Clause)  27.52
      • 4.  Limitation on Landlord’s Liability
        • a.  Form: Landlord’s Liability (Landlord’s Clause)  27.53
        • b.  Form: Landlord’s Liability (Negotiated Clause)  27.54
      • 5.  Cure by Landlord’s Lender
        • a.  Form: Cure by Landlord’s Lender (Landlord’s Clause)  27.55
        • b.  Form: Cure by Landlord’s Lender (Negotiated Clause)  27.56

28

Bankruptcy Issues

Jess R. Bressi

  • I.  GENERAL CONSIDERATIONS
    • A.  Introduction  28.1
    • B.  Basic Concepts and Procedures of Bankruptcy Law
      • 1.  Automatic Stay  28.2
      • 2.  Assumption or Rejection of Leases  28.3
        • a.  Tenant as Debtor  28.3A
          • (1)  Rejection of Lease by Tenant or Trustee  28.3B
          • (2)  Assumption of Lease by Tenant or Trustee  28.3C
          • (3)  Nondebtor Landlord’s Damages After Rejection  28.3D
        • b.  Landlord as Debtor  28.3E
          • (1)  Rejection or Acceptance of Lease by Landlord or Trustee  28.3F
          • (2)  “Ride Through” Doctrine  28.3G
          • (3)  Rights of Nondebtor Tenant  28.3H
      • 3.  Sale or Assignment of Lease  28.4
      • 4.  Special Rules for Shopping Center Leases  28.5
    • C.  Definition of “Rent”  28.6
    • D.  Security Deposit
      • 1.  Security Interest in Cash Security Deposit  28.7
      • 2.  Waiver of CC §1950.7 Relating to Refund of Security Deposit  28.8
    • E.  Operating Covenants  28.9
    • F.  Use Clause  28.10
    • G.  Guaranty  28.11
    • H.  Attorney Fees  28.12
  • II.  DRAFTING LEASE CLAUSES
    • A.  Events of Default; Remedies
      • 1.  Form: Tenant’s Insolvency (Landlord’s Clause)  28.13
      • 2.  Form: Insolvency Default Remedies (Landlord’s Clause)  28.14
    • B.  Form: Lease Assignment in Bankruptcy: Capture of Consideration and Mandatory Assumption (Landlord’s Clause)  28.15

29

Title and Quiet Enjoyment

Stathi G. Marcopulos

Carolyn J. Stein

  • I.  GENERAL CONSIDERATIONS
    • A.  Landlord’s and Tenant’s Objectives  29.1
    • B.  Underlying Documents
      • 1.  REAs and CC&Rs  29.2
        • a.  Purpose and Creation of REA  29.3
        • b.  Importance of Tenant’s Review of REA  29.4
      • 2.  Lease Subject to Underlying Documents  29.5
    • C.  Covenant of Quiet Enjoyment  29.6
    • D.  Title Insurance
      • 1.  Tenant’s Reliance on Landlord’s Policy and Representations  29.7
      • 2.  Tenant’s Due Diligence  29.8
      • 3.  Tenant’s Contingency Language  29.9
      • 4.  Tenant’s Need for Title Insurance  29.10
      • 5.  Leasehold Title Insurance  29.11
        • a.  1975 Leasehold Policy Forms  29.12
        • b.  ALTA 13 Series Coverage Endorsements  29.13
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Title and Quiet Enjoyment (Title of Article)  29.14
    • B.  Title Matters
      • 1.  Form: Underlying Documents (Landlord’s Clause)  29.15
      • 2.  Form: Title Matters (Tenant’s Clause)  29.16
      • 3.  Form: Title Matters (Negotiated Clause)  29.17
    • C.  Quiet Enjoyment
      • 1.  Form: Covenant of Quiet Enjoyment (Landlord’s Clause)  29.18
      • 2.  Form: Covenant of Quiet Enjoyment (Tenant’s Clause)  29.19
      • 3.  Form: Covenant of Quiet Enjoyment (Negotiated Clause)  29.20

30

Hazardous Materials

Stuart I. Block

Richard J. Kaiser

Kimberly A. Weber

  • I.  GENERAL CONSIDERATIONS
    • A.  Advantages of Environmental Clauses  30.1
    • B.  Applicable Laws  30.2
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Hazardous Materials (Title of Article)  30.3
    • B.  Hazardous Materials; Compliance With Environmental Laws
      • 1.  Form: Hazardous Materials; Compliance With Environmental Laws (Landlord’s Clause)  30.4
      • 2.  Form: Hazardous Materials; Compliance With Environmental Laws; Landlord’s Representations and Warranties (Tenant’s Clause)  30.5
      • 3.  Form: Known Preexisting Conditions (Landlord’s Clause)  30.6
    • C.  Form: Use of Hazardous Materials (Landlord’s Clause)  30.7
    • D.  Form: Environmental Questionnaire and Disclosure Statement (Landlord’s Clause)  30.8
    • E.  Notice; Investigation and Remediation
      • 1.  Form: Notice (Landlord’s Clause)  30.9
      • 2.  Form: Investigation and Remediation (Landlord’s Clause)  30.10
      • 3.  Form: Investigation and Remediation—Landlord’s Obligations (Tenant’s Clause)  30.11
    • F.  Indemnification
      • 1.  Form: Indemnification by Tenant (Landlord’s Clause)  30.12
      • 2.  Form: Indemnification by Tenant (Tenant’s Clause)  30.13
      • 3.  Form: Indemnification by Tenant (Negotiated Clause)  30.14
      • 4.  Form: Indemnification by Landlord (Tenant’s Clause)  30.15
    • G.  Asbestos
      • 1.  Form: Asbestos (Landlord’s Clause)  30.16
      • 2.  Form: Asbestos (Tenant’s Clause)  30.17
    • H.  Mold
      • 1.  Form: Mold (Tenant’s Clause)  30.18
      • 2.  Form: Mold (Negotiated Clause)  30.19
    • I.  Form: Termination of Lease (Landlord’s Clause)  30.20

31

Promotional Charges and Advertising

C. Gregg Ankenman

Jennifer Steindler

  • I.  GENERAL CONSIDERATIONS  31.1
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Promotional Services and Advertising (Title of Article)  31.2
    • B.  Form: Initial Promotional Assessment (Landlord’s Clause)  31.3
    • C.  Promotional Charge
      • 1.  Form: Promotional Charge (Landlord’s Clause)  31.4
      • 2.  Form: Promotional Charge (Tenant’s Clause)  31.5
      • 3.  Form: Promotional Charge (Negotiated Clause)  31.6
    • D.  Form: Required Advertising (Landlord’s Clause)  31.7
    • E.  Shopping Center Credit Card and Gift Cards
      • 1.  Form: Shopping Center Credit Card and Gift Cards (Landlord’s Clause)  31.8
      • 2.  Form: Shopping Center Credit Card and Gift Cards (Negotiated Clause)  31.9

32

Security Deposits and Letters of Credit

Scott D. Brooks

Timothy S. Williams

  • I.  GENERAL CONSIDERATIONS
    • A.  Security Deposits  32.1
      • 1.  Requirements of CC §1950.7  32.2
      • 2.  Amount of Security Deposit  32.3
      • 3.  Use of Security Deposit  32.4
      • 4.  Tax Consequences  32.5
    • B.  Letters of Credit  32.6
      • 1.  Issuer’s Obligations  32.7
      • 2.  Advantages of Letter of Credit  32.8
      • 3.  Impact of Bankruptcy  32.9
  • II.  DRAFTING LEASE CLAUSES
    • A.  Security Deposits
      • 1.  Delivery, Holding, and Application of Security Deposit
        • a.  Form: Delivery, Holding, and Application of Security Deposit (Landlord’s Clause)  32.10
        • b.  Form: Delivery, Holding, and Application of Security Deposit (Negotiated Clause)  32.11
      • 2.  Form: Restoration of Security Deposit (Landlord’s and Negotiated Clause)  32.12
      • 3.  Landlord’s Right to Transfer Security Deposit
        • a.  Form: Transfer of Security Deposit (Landlord’s Clause)  32.13
        • b.  Form: Transfer of Security Deposit (Negotiated Clause)  32.14
      • 4.  Form: Assignment or Encumbrance of Security Deposit (Landlord’s and Negotiated Clause)  32.15
      • 5.  Waiver of Statutory Requirements; No Interest on Security Deposit
        • a.  Form: Waiver of Statutory Requirements; No Interest on Security Deposit (Landlord’s Clause)  32.16
        • b.  Form: Interest on Security Deposit (Negotiated Clause)  32.17
      • 6.  Return of Security Deposit
        • a.  Form: Return of Security Deposit (Landlord’s Clause)  32.18
        • b.  Form: Return of Security Deposit (Negotiated Clause)  32.19
    • B.  Letters of Credit
      • 1.  Form: Delivery and Holding of Letter of Credit (Landlord’s and Negotiated Clause)  32.20
      • 2.  Landlord’s Right to Draw on Letter of Credit
        • a.  Form: Landlord’s Right to Draw on Letter of Credit (Landlord’s Clause)  32.21
        • b.  Form: Landlord’s Right to Draw on Letter of Credit (Negotiated Clause)  32.22
      • 3.  Restoration of Letter of Credit
        • a.  Form: Restoration of Letter of Credit (Landlord’s Clause)  32.23
        • b.  Form: Restoration of Letter of Credit (Negotiated Clause)  32.24
      • 4.  Landlord’s Right to Transfer Letter of Credit
        • a.  Form: Right to Transfer Letter of Credit (Landlord’s Clause)  32.25
        • b.  Form: Right to Transfer Letter of Credit (Negotiated Clause)  32.26
      • 5.  Form: Assignment or Encumbrance of Letter of Credit (Landlord’s and Negotiated Clause)  32.27
      • 6.  Form: Periodic Reduction of Letter of Credit (Negotiated Clause)  32.28
      • 7.  Form: Letter of Credit Is Not Security Deposit (Landlord’s Clause)  32.29
      • 8.  Tenant Waivers
        • a.  Form: Non-Interference by Tenant (Landlord’s Clause)  32.29A
        • b.  Form: Waiver of Certain Relief (Landlord’s Clause)  32.29B
        • c.  Form: Remedy for Improper Drafts (Landlord’s Clause)  32.29C
  • III.  FORM: LETTER-OF-CREDIT EXHIBIT (LANDLORD’S EXHIBIT)  32.30

33

Holding Over and Surrender of Premises

Andréa D. Cohen

Patricia A. Kim

Rebecca L. Powlan

  • I.  GENERAL CONSIDERATIONS  33.1
    • A.  Surrender of Premises  33.2
      • 1.  Termination of Lease Through Surrender of Premises
        • a.  Before 1971  33.3
        • b.  After 1970—Effect of CC §§1951.2 and 1951.4  33.4
      • 2.  Redelivery of Premises at End of Term  33.5
      • 3.  Measure of Damages  33.6
    • B.  Holding Over in Premises  33.7
      • 1.  Rent  33.8
      • 2.  Options  33.9
      • 3.  Legal Effect of Holding Over  33.10
        • a.  When Landlord Does Not Consent  33.11
        • b.  When Landlord Expressly or Impliedly Consents  33.12
    • C.  Condition of the Premises  33.13
    • D.  Tenant’s Forfeiture of Property Remaining in Premises  33.14
  • II.  DRAFTING LEASE CLAUSES
    • A.  Surrender of Premises
      • 1.  Form: Surrender of Premises (Landlord’s Clause)  33.15
      • 2.  Form: Surrender of Premises (Tenant’s Clause)  33.16
      • 3.  Form: Surrender of Premises (Negotiated Clause)  33.17
      • 4.  Form: No Implied Acceptance of Surrender (Landlord’s Clause)  33.18
      • 5.  Form: No Implied Surrender or Acceptance of Surrender (Tenant’s and Negotiated Clause)  33.19
    • B.  Holding Over
      • 1.  Form: Holding Over (Landlord’s Clause)  33.20
      • 2.  Form: Holding Over (Tenant’s Clause)  33.21
      • 3.  Form: Holding Over (Negotiated Clause)  33.22

34

Mechanics Liens

Jonathan H. Bauman

Kimberly A. Weber

  • I.  GENERAL CONSIDERATIONS  34.1
    • A.  Purposes of Mechanics Lien Clause in Retail Lease  34.2
      • 1.  Removing Clouds on Title  34.3
      • 2.  Protecting Landlord From Monetary Liability  34.4
    • B.  Elements of Typical Mechanics Lien Clause  34.5
    • C.  Notice of Nonresponsibility  34.6
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Mechanics Liens (Landlord’s Clause)  34.7
    • B.  Form: Mechanics Liens (Tenant’s Clause)  34.8
    • C.  Form: Mechanics Liens (Negotiated Clause)  34.9

35

Nonwaiver

Estelle M. Braaf

  • I.  GENERAL CONSIDERATIONS  35.1
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Nonwaiver; No Accord and Satisfaction (Landlord’s Clause)  35.2
    • B.  Form: Nonwaiver (Tenant’s Clause)  35.3
    • C.  Form: Nonwaiver; No Accord and Satisfaction (Negotiated Clause)  35.4

36

Alternative Dispute Resolution

Estelle M. Braaf

  • I.  GENERAL CONSIDERATIONS
    • A.  ADR Versus Litigation  36.1
    • B.  Principal Forms of ADR  36.2
    • C.  Which Disputes?  36.3
    • D.  Arbitration Generally Final; Discovery Limited  36.4
    • E.  Drafting Concerns  36.5
  • II.  DRAFTING LEASE CLAUSES  36.6
    • A.  Form: Negotiation (Landlord’s and Tenant’s Clause)  36.7
    • B.  Form: Mediation (Landlord’s and Tenant’s Clause)  36.8
    • C.  Arbitration
      • 1.  Form: Arbitration (Landlord’s and Tenant’s Clause)  36.9
      • 2.  Form: Qualifications of Arbitrators (Landlord’s and Tenant’s Clause)  36.10
      • 3.  Form: Venue (Landlord’s and Tenant’s Clause)  36.11
      • 4.  Form: Demand and Limitation on Claims (Landlord’s and Tenant’s Clause)  36.12
      • 5.  Form: Provisional Remedies (Landlord’s and Tenant’s Clause)  36.13
      • 6.  Form: Discovery (Landlord’s and Tenant’s Clause)  36.14
      • 7.  Form: Application of California Evidence Code (Landlord’s and Tenant’s Clause)  36.15
      • 8.  Form: Cost of Arbitration and Attorney Fees (Landlord’s and Tenant’s Clause)  36.16
      • 9.  Form: Notice (Landlord’s and Tenant’s Clause)  36.17
    • D.  Form: Reference (Landlord’s and Tenant’s Clause)  36.18

37

Attorney Fees

Estelle M. Braaf

  • I.  GENERAL CONSIDERATIONS
    • A.  Basic Considerations  37.1
      • 1.  Prevailing Party  37.2
      • 2.  Applicability to All or Part of Contract  37.3
      • 3.  Nonsignatories  37.4
      • 4.  Contract and Noncontract Claims  37.5
    • B.  Additional Considerations  37.6
  • II.  FORM: ATTORNEY FEES AND COSTS (LANDLORD’S AND TENANT’S CLAUSE)  37.7

38

Miscellaneous Clauses and Execution of Lease

Jonathan H. Bauman

Stathi G. Marcopulos

James R. McCoy, Jr.

  • I.  GENERAL CONSIDERATIONS
    • A.  Miscellaneous Clauses  38.1
    • B.  Execution of Lease  38.2
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Miscellaneous (Title of Article)  38.3
    • B.  Notices
      • 1.  Form: Notices (Landlord’s Clause)  38.4
      • 2.  Form: Notices (Tenant’s and Negotiated Clause)  38.5
    • C.  Force Majeure
      • 1.  Form: Force Majeure (Landlord’s Clause)  38.6
      • 2.  Form: Force Majeure (Tenant’s Clause)  38.7
      • 3.  Form: Force Majeure (Negotiated Clause)  38.8
    • D.  Confidentiality
      • 1.  Form: Confidentiality (Landlord’s Clause)  38.9
      • 2.  Form: Confidentiality (Tenant’s and Negotiated Clause)  38.10
    • E.  Form: Entire Agreement; Amendments (Landlord’s and Tenant’s Clause)  38.11
    • F.  Form: Governing Law; Venue (Landlord’s and Tenant’s Clause)  38.12
    • G.  Form: Binding Effect (Landlord’s and Tenant’s Clause)  38.13
    • H.  Form: Brokers (Landlord’s and Tenant’s Clause)  38.14
    • I.  Form: Merger (Landlord’s and Tenant’s Clause)  38.15
    • J.  Form: Proper Authority (Landlord’s and Tenant’s Clause)  38.16
    • K.  Transfer of Landlord’s Interest
      • 1.  Form: Transfer of Landlord’s Interest (Landlord’s Clause)  38.17
      • 2.  Form: Transfer of Landlord’s Interest (Tenant’s and Negotiated Clause)  38.18
    • L.  Form: Interest Rate (Landlord’s and Tenant’s Clause)  38.19
    • M.  Form: Waiver of Jury Trial (Landlord’s and Tenant’s Clause)  38.20
    • N.  Form: Security (Landlord’s and Tenant’s Clause)  38.21
    • O.  Form: Anti-Terrorism Representations (Landlord’s and Tenant’s Clause)  38.22
    • P.  Form: Exhibits (Landlord’s and Tenant’s Clause)  38.23
    • Q.  Form: Joint and Several Liability (Landlord’s and Tenant’s Clause)  38.24
    • R.  Form: When Lease Becomes Binding (Landlord’s and Tenant’s Clause)  38.25
    • S.  Form: Word Usage (Landlord’s and Tenant’s Clause)  38.26
    • T.  Form: Captions (Landlord’s and Tenant’s Clause)  38.27
    • U.  Form: Counting Days (Landlord’s and Tenant’s Clause)  38.28
    • V.  Form: Reasonableness and Good Faith (Landlord’s and Tenant’s Clause)  38.29
    • W.  Form: Time of the Essence (Landlord’s and Tenant’s Clause)  38.29A
    • X.  Form: Partial Invalidity (Landlord’s and Tenant’s Clause)  38.30
    • Y.  Form: Certified Access Specialist (CASp) Disclosure (Landlord’s and Tenant’s Clause)  38.30A
  • III.  ADDITIONAL LANDLORD CLAUSES
    • A.  Credit Report
      • 1.  Form: Credit Report (Landlord’s Clause)  38.31
      • 2.  Form: Credit Report (Negotiated Clause)  38.32
    • B.  Service Charges
      • 1.  Form: Service Charges (Landlord’s Clause)  38.33
      • 2.  Form: Service Charges (Negotiated Clause)  38.34
    • C.  Right to Lease
      • 1.  Form: Right to Lease (Landlord’s Clause)  38.35
      • 2.  Form: Right to Lease (Negotiated Clause)  38.36
    • D.  Landlord’s Access
      • 1.  Form: Landlord’s Access (Landlord’s Clause)  38.37
      • 2.  Form: Landlord’s Access (Negotiated Clause)  38.38
    • E.  Construction Activities and Screening
      • 1.  Form: Construction Activities and Screening (Landlord’s Clause)  38.39
      • 2.  Form: Construction Activities and Screening (Negotiated Clause)  38.40
    • F.  Independent Covenants
      • 1.  Form: Independent Covenants (Landlord’s Clause)  38.40A
      • 2.  Form: Independent Covenants (Negotiated Clause)  38.40B
    • G.  Modifications Required by Landlord’s Lender
      • 1.  Form: Modifications Required by Landlord’s Lender (Landlord’s Clause)  38.40C
      • 2.  Form: Modifications Required by Landlord’s Lender (Negotiated Clause)  38.40D
  • IV.  DRAFTING SIGNATURE BLOCKS
    • A.  Form: Execution by Limited Liability Company (Landlord’s and Tenant’s Signature Block)  38.41
    • B.  Form: Execution by Corporation (Landlord’s and Tenant’s Signature Block)  38.42
    • C.  Form: Execution by General or Limited Partnership (Landlord’s and Tenant’s Signature Block)  38.43
    • D.  Form: Execution for Party Entity by Another Entity (Landlord’s and Tenant’s Signature Block)  38.44
    • E.  Form: Execution by Natural Person (Landlord’s and Tenant’s Signature Block)  38.45
    • F.  Form: Execution by Trust (Landlord’s and Tenant’s Signature Block)  38.46

39

Construction Issues

Scott D. Brooks

Julia L. Whitelaw

Jennifer Steindler

  • I.  GENERAL CONSIDERATIONS  39.1
    • A.  Work Letter (Construction Exhibit)  39.2
    • B.  Allocation of Construction Responsibilities  39.3
    • C.  Primary Issues and Objectives of Construction Exhibits  39.4
    • D.  Plan Approval
      • 1.  Procedure for Approval of Plans  39.5
      • 2.  Standard for Plan Approval  39.6
      • 3.  Negotiating Plan Approval  39.7
      • 4.  Implied Warranty of Plan Correctness  39.8
    • E.  Compliance With Legal Requirements
      • 1.  Obtaining Permits  39.9
      • 2.  Compliance With Special Construction Requirements  39.10
      • 3.  Compliance With ADA Requirements  39.11
    • F.  Changes and Change Orders
      • 1.  Potential Changes and Requirement That Changes Be Accepted  39.12
      • 2.  Written Change Order  39.13
      • 3.  Adjustments to the Completion Date  39.14
    • G.  Improvement Costs and Construction Allowances  39.15
      • 1.  Reimbursable Construction Costs  39.16
      • 2.  Items That Should Be Expressly Included or Excluded  39.17
      • 3.  Items That Should Be Limited  39.18
      • 4.  Payment Procedure  39.19
      • 5.  Rental Adjustments for Unused Allowances  39.20
      • 6.  Recapture of Costs by Landlord  39.21
      • 7.  Protections for Constructing Party Entitled to Reimbursement  39.22
      • 8.  Protections for Party Obligated to Reimburse Constructing Party  39.23
      • 9.  Notice of Nonresponsibility  39.24
      • 10.  Protection Against Unexpected Costs  39.25
      • 11.  Tax Consequences of Construction Allowance  39.26
    • H.  Delivery Date, Delivery-of-Possession Requirements, and Late Delivery Penalty  39.27
    • I.  Substantial Completion  39.28
    • J.  Acceptance of Premises and Corrective Work
      • 1.  Acceptance Subject to Punch List Items  39.29
      • 2.  Time Limit on Request for Correction of Defects  39.30
      • 3.  Right of Nonconstruction Party to Complete Incomplete Work  39.31
      • 4.  Standard of Performance and Warranties  39.32
    • K.  Contractors and Suppliers  39.33
    • L.  Insurance Requirements  39.34
    • M.  Requirements for Completion of Work  39.35
    • N.  Risk of Delay in Completion of Work  39.36
  • II.  DRAFTING LEASE CLAUSES AND WORK LETTER
    • A.  Clauses Commonly Included in Body of Lease  39.37
    • B.  Clauses Commonly Included in Work Letter  39.38

40

Rules and Regulations

Andréa D. Cohen

Carolyn J. Stein

  • I.  GENERAL CONSIDERATIONS
    • A.  Establishing Rules and Regulations  40.1
    • B.  Landlord’s Right to Modify Rules and Regulations  40.2
      • 1.  Tenant’s Consent to Modifications  40.3
      • 2.  Consistency With Other Lease Provisions  40.4
      • 3.  Reasonableness and Nondiscrimination  40.5
      • 4.  Enforcement and Landlord Liability  40.6
      • 5.  Impact on Tenant’s Rights and Obligations  40.7
      • 6.  Notice of Change  40.8
    • C.  Rules and Regulations Exhibit  40.9
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Rules and Regulations (Landlord’s Clause)  40.10
    • B.  Form: Rules and Regulations (Tenant's Form)  40.10A
    • C.  Form: Rules and Regulations (Negotiated Clause)  40.11
  • III.  DRAFTING LEASE EXHIBIT
    • A.  Form: Title of Exhibit (Landlord’s Clause)  40.12
    • B.  Form: Introductory Clause (Landlord’s Clause)  40.13
    • C.  Form: Staffing Premises (Landlord’s Clause)  40.14
    • D.  Form: Lighting (Landlord’s Clause)  40.15
    • E.  Form: Maintenance (Landlord’s Clause)  40.16
    • F.  Form: Retail Merchandise (Landlord’s Clause)  40.17
    • G.  Form: Office or Other Nonsales Space (Landlord’s Clause)  40.18
    • H.  Form: Trash (Landlord’s Clause)  40.19
    • I.  Form: Manner of Use of Premises (Landlord’s Clause)  40.20
    • J.  Form: Loitering (Landlord’s Clause)  40.21
    • K.  Form: Damage and Defacement (Landlord’s Clause)  40.22
    • L.  Form: Awnings and Curtains (Landlord’s Clause)  40.23
    • M.  Form: Machinery With Certain Effects Prohibited (Landlord’s Clause)  40.24
    • N.  Form: Permitted Equipment (Landlord’s Clause)  40.25
    • O.  Form: Interference With Other Tenants or Patrons; Animals; Vehicles (Landlord’s Clause)  40.26
    • P.  Form: Movement of Freight (Landlord’s Clause)  40.27
    • Q.  Form: Landlord’s Right to Exclude (Landlord’s Clause)  40.28
    • R.  Form: Landlord’s Right to Close Shopping Center (Landlord’s Clause)  40.29
    • S.  Form: Modifications to Rules and Regulations (Landlord’s Clause)  40.30

41

Estoppel Certificates

Scott D. Brooks

Daniel B. Myers

  • I.  GENERAL CONSIDERATIONS  41.1
    • A.  Purpose and Importance of Estoppel Certificate  41.2
    • B.  Duty to Provide Estoppel Certificate  41.3
    • C.  Legal Effect  41.4
    • D.  Duty to Provide Accurate Information  41.5
    • E.  Practical Advice When Responding to Estoppel Certificate Requests  41.6
  • II.  LEASE CLAUSE DRAFTING CONSIDERATIONS
    • A.  Landlord Concerns  41.7
      • 1.  Amount of Time to Provide Estoppel Certificate  41.8
      • 2.  Delay or Failure to Respond  41.9
      • 3.  Attaching Copy of Estoppel Certificate  41.10
    • B.  Tenant Concerns  41.11
  • III.  DRAFTING LEASE CLAUSES
    • A.  Form: Estoppel Certificate (Landlord’s Clause)  41.12
    • B.  Form: Estoppel Certificate (Tenant’s Clause)  41.13
    • C.  Form: Estoppel Certificate (Negotiated Clause)  41.14
  • IV.  SAMPLE ESTOPPEL CERTIFICATE EXHIBITS
    • A.  Form: Estoppel Certificate (Landlord’s Exhibit)  41.15
    • B.  Form: Estoppel Certificate (Tenant’s Exhibit)  41.16

42

Guaranty of Lease

Daniel J. Villalpando

  • I.  GENERAL CONSIDERATIONS
    • A.  Purposes of Guaranties  42.1
    • B.  Nature of Guaranties  42.2
    • C.  Legal Requirements for Creating a Guaranty Relationship  42.3
    • D.  California Rules Governing Guaranties  42.4
    • E.  Fraudulent Transfers  42.5
    • F.  Scope of Guaranty
      • 1.  Payment Versus Performance  42.6
      • 2.  Payment Versus Collection  42.7
      • 3.  Obligation Guaranteed  42.8
      • 4.  Continuing Guaranties  42.9
      • 5.  Maximum Liability  42.10
      • 6.  Attorney Fees  42.11
    • G.  Waivers  42.12
      • 1.  Waiver of Diligence and Demand  42.13
      • 2.  Waiver of Disclosure  42.14
      • 3.  Exhaustion of Security; Proceeding Against Principal Debtor  42.15
      • 4.  Modifying the Obligation  42.16
    • H.  Subordination of Guarantor’s Rights  42.17
    • I.  Reinstatement of Guaranty After Refund of Payment  42.18
  • II.  DRAFTING LEASE CLAUSES
    • A.  Form: Guaranty Required (Landlord’s Clause)  42.19
    • B.  Form: Guaranty Required (Tenant’s and Negotiated Clause)  42.20
  • III.  DRAFTING GUARANTY
    • A.  Form: Introduction and Recitals (Landlord’s and Guarantor’s Clause)  42.21
    • B.  Nature of Guaranty
      • 1.  Form: Nature of Guaranty (Landlord’s Clause)  42.22
      • 2.  Form: Nature of Guaranty (Guarantor’s Clause)  42.23
    • C.  Effect of Lease Modifications; Continuing Guaranty
      • 1.  Form: Effect of Lease Modifications; Continuing Guaranty (Landlord’s Clause)  42.24
      • 2.  Form: Effect of Lease Modifications (Guarantor’s Clause)  42.25
    • D.  Waiver of Guarantor’s Rights
      • 1.  Form: Waiver of Guarantor’s Rights (Landlord’s Clause)  42.26
      • 2.  Form: Reservation of Guarantor’s Rights (Guarantor’s Clause)  42.27
    • E.  Form: Waiver of Subrogation (Landlord’s Clause)  42.28
    • F.  Form: Rights Are Cumulative (Landlord’s Clause)  42.29
    • G.  Form: Successors and Assigns (Landlord’s and Guarantor’s Clause)  42.30
    • H.  Bankruptcy Concerns
      • 1.  Form: Bankruptcy Concerns (Landlord’s Clause)  42.31
      • 2.  Form: Bankruptcy Concerns (Guarantor’s Clause)  42.32
    • I.  Financial Statements
      • 1.  Form: Financial Statements (Landlord’s Clause)  42.33
      • 2.  Form: Financial Statements (Guarantor’s Clause)  42.34
    • J.  Form: Waiver of Jury Trial (Landlord’s and Guarantor’s Clause)  42.35
    • K.  Choice of Law, Jurisdiction, Forum, Venue
      • 1.  Form: Choice of Law, Jurisdiction, Forum, Venue (Landlord’s Clause)  42.36
      • 2.  Form: Choice of Law (Guarantor’s Clause)  42.37
    • L.  Form: Revival of Guaranty (Landlord’s and Guarantor’s Clause)  42.38
    • M.  Form: Miscellaneous Clauses (Landlord’s and Guarantor’s Clauses)  42.39
    • N.  Form: Signature Blocks (Landlord’s and Guarantor’s Clause)  42.40

43

Memorandum of Lease

James R. McCoy, Jr.

  • I.  GENERAL CONSIDERATIONS
    • A.  Notice  43.1
    • B.  Recording of Lease  43.2
      • 1.  Landlord’s Contiguous Property  43.3
      • 2.  Landlord’s Concerns  43.4
    • C.  Short-Form Lease versus Memorandum of Lease  43.5
  • II.  DRAFTING LEASE CLAUSES
    • A.  Recordation of Lease
      • 1.  Form: Recordation of Lease (Landlord’s Clause)  43.6
      • 2.  Form: Recordation of Lease (Tenant’s and Negotiated Clause)  43.7
    • B.  Form: Memorandum of Lease (Tenant’s and Negotiated Exhibit)  43.8

44

Subordination, Nondisturbance, and Attornment

Daniel J. Villalpando

Daniel B. Myers

  • I.  GENERAL CONSIDERATIONS
    • A.  SNDA and Lease Clauses  44.1
    • B.  Typical SNDA Clauses
      • 1.  Subordination  44.2
      • 2.  Nondisturbance  44.3
      • 3.  Attornment  44.4
      • 4.  Limitation of Successor Landlord Obligations  44.5
        • a.  Liability for Act of Prior Landlord  44.6
        • b.  Credit for Prepaid Rent and Security Deposit  44.7
        • c.  Amendment or Modification of Lease  44.8
        • d.  Surrender, Cancellation, or Termination of Lease  44.9
        • e.  Offsets  44.10
        • f.  Casualty and Condemnation  44.11
      • 5.  Lender-Favorable Clauses
        • a.  Assignment of Lease and Payment of Rents  44.12
        • b.  Lender’s Cure Rights  44.13
        • c.  Limitation of Liability  44.14
        • d.  Representations and Warranties by Landlord and Tenant  44.15
    • C.  Role of Parties in SNDA Negotiations  44.16
  • II.  DRAFTING LEASE CLAUSES  44.17
    • A.  Form: Subordination, Attornment, and Estoppel Certificate (Title of Article)  44.18
    • B.  Form: Subordination to Loans (Landlord’s Clause)  44.19
    • C.  Form: Subordination to Loans; Nondisturbance Agreements (Tenant’s Clause)  44.20
    • D.  Form: Subordination to Loans; Nondisturbance Agreements (Negotiated Clause)  44.21
    • E.  Form: Attornment (Landlord’s Clause)  44.22
    • F.  Form: Attornment (Tenant’s and Negotiated Clause)  44.23

RETAIL LEASING: DRAFTING AND NEGOTIATING THE LEASE

(1st Edition)

November 2019

TABLE OF CONTENTS

 

File Name

Book Section

Title

CH01

Chapter 1

Introduction to Retail Leasing

01-036

§1.36

For Landlord or Tenant

01-037

§1.37

For Tenant

01-038

§1.38

Lender’s Requirements

CH02

Chapter 2

Letters of Intent

02-014

§2.14

Introduction; Parties; Premises

02-015

§2.15

Term; Options; Rent

02-016

§2.16

Security Deposit; Guarantor

02-017

§2.17

Permitted Uses; Exclusive Use; Radius Restriction

02-018

§2.18

Opening Covenant; Operating Covenant; Go Dark; Cotenancy

02-019

§2.19

Construction of Premises

02-020

§2.20

Maintenance, Repair, and Replacement

02-021

§2.21

Assignment/Subletting

02-022

§2.22

Parking

02-023

§2.23

Tenant’s Signage

02-024

§2.24

Lease Form

02-025

§2.25

Expiration

02-026

§2.26

Confidentiality

02-027

§2.27

Brokers

02-028

§2.28

Disclaimer

02-029

§2.29

Signature; Acknowledgment

CH03

Chapter 3

Summary of Basic Lease Information

03-003

§3.3

Retail Lease (Title of Lease) (Landlord’s and Tenant’s Clause)

03-004

§3.4

Introductory Lease Covenant (Landlord’s and Tenant’s Clause)

03-005

§3.5

Summary of Basic Lease Information (Title of Article)

03-006

§3.6

Introductory Clause (Landlord’s and Tenant’s Clause)

03-007

§3.7

Effective Date (Landlord’s and Tenant’s Clause)

03-008

§3.8

Landlord (Landlord’s and Tenant’s Clause)

03-009

§3.9

Tenant (Landlord’s and Tenant’s Clause)

03-010

§3.10

Tenant’s Trade Name (Landlord’s Clause)

03-011

§3.11

Tenant’s Trade Name (Tenant’s Clause)

03-012

§3.12

Shopping Center (Landlord’s Clause)

03-013

§3.13

Shopping Center (Tenant’s Clause)

03-014

§3.14

Premises (Landlord’s Clause)

03-015

§3.15

Premises (Tenant’s Clause)

03-016

§3.16

Permitted Use (Landlord’s Clause)

03-017

§3.17

Permitted Use (Tenant’s Clause)

03-018

§3.18

Term (Landlord’s and Tenant’s Clause)

03-019

§3.19

Option Terms (Landlord’s and Tenant’s Clause)

03-020

§3.20

Minimum Rent (Landlord’s and Tenant’s Clause)

03-021

§3.21

Percentage Rent Rate (Landlord’s and Tenant’s Clause)

03-022

§3.22

Commencement Date (Landlord’s Clause)

03-023

§3.23

Commencement Date (Tenant’s Clause)

03-024

§3.24

Guarantor (Landlord’s and Tenant’s Clause)

03-025

§3.25

Landlord’s Address for Rent and Notices (Landlord’s and Tenant’s Clause)

03-026

§3.26

Tenant’s Address for Notices (Landlord’s and Tenant’s Clause)

03-027

§3.27

Real Estate Manager (Landlord’s and Tenant’s Clause)

03-028

§3.28

Broker (Landlord’s and Tenant’s Clause)

03-029

§3.29

Initial Promotional Assessment (Landlord’s Clause)

03-030

§3.30

Promotional Charge (Landlord’s and Tenant’s Clause)

03-031

§3.31

Radius Restriction (Landlord’s Clause)

03-032

§3.32

Security Deposit (Landlord’s Clause)

03-033

§3.33

Tenant Improvement Allowance (Tenant’s Clause)

03-034

§3.34

References; Conflicts (Landlord’s and Tenant’s Clause)

CH04

Chapter 4

Premises

04-023

§4.23

Premises (Title of Article)

04-024

§4.24

Lease of Premises (Landlord’s and Tenant’s Clause)

04-025

§4.25

Floor Area Defined (Landlord’s Clause)

04-026

§4.26

Floor Area Defined (Tenant’s Clause)

04-027

§4.27

Verifying the Floor Area (Landlord’s Clause)

04-028

§4.28

Verifying the Floor Area (Tenant’s Clause)

04-029

§4.29

Verifying the Floor Area (Negotiated Clause)

04-030

§4.30

Reservation of Rights (Landlord’s Clause)

04-031

§4.31

Reservation of Rights (Negotiated Clause)

04-032

§4.32

Expansion of Premises—Right of First Offer (Landlord’s Clause)

04-033

§4.33

Expansion of Premises—Right of First Offer (Negotiated Clause)

04-034

§4.34

Expansion of Premises—Right of First Refusal (Landlord’s Clause)

04-035

§4.35

Expansion of Premises—Right of First Refusal (Negotiated Clause)

04-036

§4.36

Relocation (Landlord’s Clause)

04-037

§4.37

Relocation (Negotiated Clause)

CH05

Chapter 5

Lease Term

05-007

§5.7

Term (Title of Article)

05-008

§5.8

Lease Term (Landlord’s Clause)

05-009

§5.9

Lease Term (Tenant’s Clause)

05-010

§5.10

Partial Month (Landlord’s and Tenant’s Clause)

05-011

§5.11

Substantial Completion of the Premises (Landlord’s Clause)

05-012

§5.12

Substantial Completion of the Premises (Tenant’s Clause)

05-013

§5.13

Confirmation of Commencement Dates (Landlord’s Clause)

05-014

§5.14

Confirmation of Commencement Dates (Tenant’s Clause)

05-015

§5.15

Delay in Delivery of Premises (Landlord’s Clause)

05-016

§5.16

Delay in Delivery of Premises (Tenant’s Clause)

05-017

§5.17

Notice of Delivery; Rent Abatement (Tenant’s Clause)

05-018

§5.18

Outside Delivery Date (Tenant’s Clause)

05-019

§5.19

Form: Acceptance and Statement of Premises, Area, and Term (Landlord’s and Tenant’s Exhibit)

CH06

Chapter 6

Options to Extend Lease Term

06-008

§6.8

Option to Extend Term (Landlord’s Clause)

06-009

§6.9

Option to Extend Term (Tenant’s Clause)

06-010

§6.10

Option to Extend Term (Negotiated Clause)

06-011

§6.11

Establishing Fair Market Rent (Landlord’s Clause)

06-012

§6.12

Establishing Fair Market Rent (Tenant’s Clause)

06-013

§6.13

Establishing Fair Market Rent—“Baseball” Method (Negotiated Clause)

06-014

§6.14

Definition of Fair Market Rent (Landlord’s Clause)

06-015

§6.15

Definition of Fair Market Rent (Tenant’s Clause)

CH07

Chapter 7

Cotenancy Requirements

07-027

§7.27

Cotenancy Requirements; Promotional Charges (Title of Article)

07-028

§7.28

Opening Cotenancy (Tenant’s Clause)

07-029

§7.29

Opening Cotenancy (Negotiated Clause)

07-030

§7.30

Operating Cotenancy (Tenant’s Clause)

07-031

§7.31

Operating Cotenancy (Negotiated Clause)

CH08

Chapter 8

Early Termination Rights

08-016

§8.16

Tenant’s Gross Sales Termination Right (Landlord’s Clause)

08-017

§8.17

Tenant’s Gross Sales Termination Right (Tenant’s Clause)

08-018

§8.18

Redevelopment or Remodeling Termination Right (Landlord’s Clause)

08-019

§8.19

Redevelopment or Remodeling Termination Right (Negotiated Clause)

08-020

§8.20

Termination for Failure to Obtain or Maintain Permits or Changes in Laws (Tenant’s Clause)

08-021

§8.21

Termination for Failure to Obtain or Maintain Permits or Changes in Laws (Negotiated Clause)

CH09

Chapter 9

Minimum Rent and Additional Rent

09-013

§9.13

Rent (Title of Article)

09-014

§9.14

Payment of Rent (Landlord’s Clause)

09-015

§9.15

Payment of Rent (Tenant’s Clause)

09-016

§9.16

Minimum Rent (Landlord’s Clause)

09-017

§9.17

Minimum Rent (Tenant’s Clause)

09-018

§9.18

Minimum Rent (Negotiated Clause)

09-019

§9.19

Proration of Minimum and Additional Rent (Landlord’s and Tenant’s Clause)

09-020

§9.20

Minimum Rent Adjustment (Landlord’s Clause)

09-021

§9.21

Minimum Rent Adjustment (Tenant’s Clause)

09-022

§9.22

Effect of Rent Control Ordinance (Landlord’s Clause)

09-023

§9.23

Additional Rent (Landlord’s and Tenant’s Clause)

CH10

Chapter 10

Late Payments

10-004

§10.4

Late Payments (Landlord’s Clause)

10-005

§10.5

Late Payments (Tenant’s Clause)

10-006

§10.6

Late Payments (Negotiated Clause)

CH11

Chapter 11

Percentage Rent

11-010

§11.10

Definition, Calculation, and Payment of Percentage Rent (Landlord’s Clause)

11-011

§11.11

Definition, Calculation, and Payment of Percentage Rent (Tenant’s Clause)

11-012

§11.12

Definition, Calculation, and Payment of Percentage Rent (Negotiated Clause)

11-013

§11.13

Gross Sales Definition (Landlord’s Clause)

11-014

§11.14

Gross Sales Definition (Tenant’s Clause)

11-015

§11.15

Gross Sales Definition (Negotiated Clause)

11-016

§11.16

Tenant’s Record-Keeping Obligations and Landlord’s Audit Rights (Landlord’s Clause)

11-017

§11.17

Tenant’s Record-Keeping Obligations and Landlord’s Audit Rights (Tenant’s Clause)

11-018

§11.18

Tenant’s Record-Keeping Obligations and Landlord’s Audit Rights (Negotiated Clause)

11-019

§11.19

Form: Monthly Sales Report (Landlord’s Exhibit)

CH12

Chapter 12

Real Property Taxes

12-007

§12.7

Taxes and Utilities (Title of Article)

12-008

§12.8

Definition of Real Property Taxes (Landlord’s Clause)

12-009

§12.9

Definition of Real Property Taxes (Tenant’s Clause)

12-010

§12.10

Proposition 13 Change in Ownership (Landlord’s Clause)

12-011

§12.11

Proposition 13 Change in Ownership (Tenant’s Clause)

12-012

§12.12

Proposition 13 Change in Ownership (Negotiated Clause)

12-013

§12.13

Manner of Payment of Real Property Taxes (Landlord’s Clause)

12-014

§12.14

Manner of Payment of Real Property Taxes (Tenant’s Clause)

12-015

§12.15

Method of Calculating Tenant’s Share of Real Property Taxes (Landlord’s Clause)

12-016

§12.16

Method of Calculating Tenant’s Share of Real Property Taxes (Tenant’s Clause)

12-017

§12.17

Taxes on Tenant’s Business Operations and Personal Property (Landlord’s and Tenant’s Clause)

12-018

§12.18

Contesting Real Property Taxes (Landlord’s Clause)

12-019

§12.19

Contesting Real Property Taxes (Tenant’s Clause)

12-020

§12.20

Contesting Real Property Taxes (Negotiated Clause)

CH13

Chapter 13

Utilities

13-011

§13.11

Provision of Utility Services (Landlord’s Clause)

13-012

§13.12

Provision of Utility Services (Tenant’s Clause)

13-013

§13.13

Provision of Utility Services (Negotiated Clause)

13-014

§13.14

Interruption of Utility Services (Landlord’s Clause)

13-015

§13.15

Interruption of Utility Services (Tenant’s Clause)

13-016

§13.16

Interruption of Utility Services (Negotiated Clause)

CH14

Chapter 14

Common Areas

14-002

§14.2

Common Areas (Title of Article)

14-003

§14.3

Definition of Common Areas (Landlord’s Clause)

14-004

§14.4

Definition of Common Areas (Tenant’s Clause)

14-005

§14.5

Nonexclusive Use of Common Areas (Landlord’s Clause)

14-006

§14.6

Nonexclusive Use of Common Areas (Tenant’s Clause)

14-007

§14.7

Landlord’s Reservation of Exclusive Control of Common Areas (Landlord’s Clause)

14-008

§14.8

Control and Use of the Common Areas; Restriction on Changes (Tenant’s Clause)

14-009

§14.9

Maintenance of Common Areas (Landlord’s Clause)

14-010

§14.10

Maintenance of Common Areas (Tenant’s Clause)

14-011

§14.11

Maintenance of Common Areas (Negotiated Clause)

14-012

§14.12

Parking (Landlord’s Clause)

14-013

§14.13

Parking (Tenant’s Clause)

14-014

§14.14

Parking (Negotiated Clause)

14-015

§14.15

Government Parking and Transportation Management Programs (Negotiated Clause)

14-016

§14.16

Electric Vehicle Charging Stations (Negotiated Clause)

14-017

§14.17

Exemption From Electric Vehicle Charging Station Statute (CC §1952.7) (Landlord’s Clause)

14-018

§14.18

Kiosk Protection (Tenant’s Clause)

14-019

§14.19

Kiosk Protection (Negotiated Clause)

CH15

Chapter 15

Common Area Costs

15-030

§15.30

Definition of Common Area Costs (Landlord’s Clause)

15-031

§15.31

Definition of Common Area Costs (Tenant’s Clause)

15-032

§15.32

Payment and Proration of Common Area Costs (Landlord’s Clause)

15-033

§15.33

Payment and Proration of Common Area Costs (Tenant’s Clause)

15-034

§15.34

Cap on Tenant’s Share of Common Area Costs (Tenant’s Clause)

15-035

§15.35

Cap on Tenant’s Share of Common Area Costs (Negotiated Clause)

15-036

§15.36

Tenant’s Audit Rights (Tenant’s Clause)

CH16

Chapter 16

Use and Trade Names

16-019

§16.19

Tenant’s Conduct of Its Business (Title of Article)

16-020

§16.20

Permitted Use (Landlord’s Clause)

16-021

§16.21

Permitted Use (Tenant’s Clause)

16-022

§16.22

Permitted Use (Negotiated Clause)

16-023

§16.23

Use Restrictions (Landlord’s Clause)

16-024

§16.24

Use Restrictions (Tenant’s Clause)

16-025

§16.25

Use Restrictions (Negotiated Clause)

16-026

§16.26

Tenant’s Trade Name (Landlord’s Clause)

16-027

§16.27

Tenant’s Trade Name (Tenant’s Clause)

16-028

§16.28

Tenant’s Trade Name (Negotiated Clause)

16-029

§16.29

Form: Prohibited Uses Exhibit (Landlord’s and Tenant’s Exhibit)

CH17

Chapter 17

Opening/Operating Covenants, Go Dark Clauses, and Hours of Operation

17-022

§17.22

Covenant to Open and Operate (Landlord’s Clause)

17-023

§17.23

Covenant to Open (Tenant’s Clause)

17-024

§17.24

Covenant to Open and Operate (Negotiated Clause)

17-025

§17.25

Exception for Key Occupant Closures (Negotiated Clause)

17-026

§17.26

Exception for Inventory (Negotiated Clause)

17-027

§17.27

Landlord’s Recapture Right (Landlord’s Clause)

17-028

§17.28

Landlord’s Recapture Right (Tenant’s Clause)

17-029

§17.29

Landlord’s Recapture Right (Negotiated Clause)

17-030

§17.30

Grand Opening Delay (Landlord’s and Negotiated Clause)

17-031

§17.31

Delayed Opening Rent (Landlord’s Clause)

17-032

§17.32

Delayed Opening Rent (Negotiated Clause)

17-033

§17.33

Hours of Operation (Landlord’s Clause)

17-034

§17.34

Hours of Operation (Tenant’s Clause)

17-035

§17.35

Hours of Operation (Negotiated Clause)

CH18

Chapter 18

Compliance With Laws

18-005

§18.5

Compliance With Laws—Premises (Landlord’s Clause)

18-006

§18.6

Compliance With Laws—Premises (Tenant’s Clause)

18-007

§18.7

Compliance With Laws—Premises (Negotiated Clause)

18-008

§18.8

Compliance With Laws—Common Areas (Landlord’s Clause)

18-009

§18.9

Compliance With Laws—Common Areas (Tenant’s Clause)

18-010

§18.10

Compliance With Laws—Common Areas (Negotiated Clause)

18-011

§18.11

Compliance With Laws—General (Negotiated Clause)

CH19

Chapter 19

Exclusive Use and Radius Restrictions

19-022

§19.22

Exclusive Use (Landlord’s Clause)

19-023

§19.23

Exclusive Use (Tenant’s Clause)

19-024

§19.24

Exclusive Use (Negotiated Clause)

19-025

§19.25

Tenant’s Remedies (Landlord’s Clause)

19-026

§19.26

Tenant’s Remedies (Tenant’s Clause)

19-027

§19.27

Tenant’s Remedies (Negotiated Clause)

19-028

§19.28

Conditions of Exclusive Use Right (Landlord’s Clause)

19-029

§19.29

Termination of Exclusive Use Right (Landlord’s Clause)

19-030

§19.30

Antitrust Indemnification (Landlord’s Clause)

19-031

§19.31

Antitrust Indemnification (Negotiated Clause)

19-032

§19.32

Radius Restriction (Landlord’s Clause)

19-033

§19.33

Radius Restriction (Negotiated Clause)

19-034

§19.34

Landlord’s Remedies (Landlord’s Clause)

19-035

§19.35

Landlord’s Remedies (Negotiated Clause)

CH20

Chapter 20

Maintenance of Premises

20-004

§20.4

Repairs and Maintenance (Title of Article)

20-005

§20.5

Landlord’s Repair and Maintenance Obligations (Landlord’s Clause)

20-006

§20.6

Landlord’s Repair and Maintenance Obligations (Tenant’s Clause)

20-007

§20.7

Landlord’s Repair and Maintenance Obligations (Negotiated Clause)

20-008

§20.8

Tenant’s Self-Help Right (Tenant’s and Negotiated Clause)

20-009

§20.9

Tenant’s Repair and Maintenance Obligations (Landlord’s Clause)

20-010

§20.10

Tenant’s Repair and Maintenance Obligations (Tenant’s Clause)

20-011

§20.11

Tenant’s Repair and Maintenance Obligations (Negotiated Clause)

20-012

§20.12

Landlord’s Self-Help Right (Landlord’s and Negotiated Clause)

20-013

§20.13

Trash Removal; Recycling (Landlord’s Clause)

20-014

§20.14

Trash Removal; Recycling (Tenant’s Clause)

20-015

§20.15

Trash Removal; Recycling (Negotiated Clause)

20-016

§20.16

Pest Control (Landlord’s Clause)

20-017

§20.17

Pest Control (Tenant’s Clause)

20-018

§20.18

Pest Control (Negotiated Clause)

20-019

§20.19

Odor and Noise Control (Landlord’s Clause)

20-020

§20.20

Odor and Noise Control (Tenant’s Clause)

20-021

§20.21

Odor and Noise Control (Negotiated Clause)

CH21

Chapter 21

Alterations, Additions, Trade Fixtures, and Personal Property

21-019

§21.19

Tenant’s Construction of Alterations (Landlord’s Clause)

21-020

§21.20

Tenant’s Construction of Alterations (Tenant’s Clause)

21-021

§21.21

Tenant’s Construction of Alterations (Negotiated Clause)

21-023

§21.23

Tenant’s Right to Install Trade Fixtures and Personal Property (Landlord’s Clause)

21-024

§21.24

Tenant’s Right to Install Trade Fixtures and Personal Property (Tenant’s Clause)

21-025

§21.25

Financing Personal Property (Landlord’s Clause)

21-026

§21.26

Financing Personal Property (Tenant’s Clause)

CH22

Chapter 22

Signage

22-002

§22.2

Signage (Title of Article)

22-003

§22.3

General Prohibition (Landlord’s Clause)

22-004

§22.4

Initial Signage (Tenant’s Clause)

22-005

§22.5

Interior Signs (Landlord’s and Tenant’s Clause)

22-006

§22.6

Exterior Premises Sign (Landlord’s and Tenant’s Clause)

22-007

§22.7

Future Signage (Tenant’s Clause)

22-008

§22.8

Pylon and Monument Signage (Tenant’s and Negotiated Clause)

22-009

§22.9

Temporary Signage (Tenant’s and Negotiated Clause)

CH23

Chapter 23

Insurance, Exculpation, and Indemnification

23-037

§23.37

Insurance (Title of Article)

23-038

§23.38

Tenant’s Insurance (Landlord’s Clause)

23-039

§23.39

Parties’ Insurance (Tenant’s Clause)

23-040

§23.40

Commercial General Liability Insurance (Landlord’s Clause)

23-041

§23.41

Commercial General Liability Insurance (Tenant’s Clause)

23-042

§23.42

Commercial General Liability Insurance (Negotiated Clause)

23-043

§23.43

Broad Form Coverage (Landlord’s and Tenant’s Clause)

23-044

§23.44

Tenant’s Workers’ Compensation and Employer Liability Coverage (Landlord’s Clause)

23-045

§23.45

Business Income Insurance (Landlord’s Clause)

23-046

§23.46

Plate-Glass Insurance (Landlord’s Clause)

23-047

§23.47

Tenant’s Property Insurance (Landlord’s Clause)

23-048

§23.48

Construction Insurance (Landlord’s Clause)

23-049

§23.49

Policy Form (Landlord’s and Tenant’s Clause)

23-050

§23.50

Additional Insureds; Loss Payees (Landlord’s Clause)

23-051

§23.51

Additional Insureds; Loss Payees (Tenant’s and Negotiated Clause)

23-052

§23.52

Delivery of Certificates and Policies (Landlord’s Clause)

23-053

§23.53

Delivery of Certificates (Tenant’s Clause)

23-054

§23.54

Delivery of Certificates and Policies (Negotiated Clause)

23-055

§23.55

Primary Insurance Endorsements for Additional Insureds (Landlord’s Clause)

23-056

§23.56

Primary Insurance Endorsements for Additional Insureds (Tenant’s Clause)

23-057

§23.57

Deductibles (Landlord’s and Tenant’s Clause)

23-058

§23.58

Blanket Policies (Landlord’s Clause)

23-059

§23.59

Blanket Policies; Self-Insurance (Tenant’s Clause)

23-060

§23.60

Landlord’s Property Insurance (Landlord’s Clause)

23-061

§23.61

Landlord’s Property Insurance (Tenant’s Clause)

23-062

§23.62

Landlord’s Property Insurance (Negotiated Clause)

23-063

§23.63

Reimbursement of Insurance Premiums; Increased Premiums (Landlord’s Clause)

23-064

§23.64

Reimbursement of Insurance Premiums (Tenant’s Clause)

23-065

§23.65

Reimbursement of Insurance Premiums; Increased Premiums Due to Use of Premises (Negotiated Clause)

23-066

§23.66

Exculpation (Landlord’s Clause)

23-067

§23.67

Exculpation (Negotiated Clause)

23-068

§23.68

Survival of Exculpation (Landlord’s Clause)

23-069

§23.69

Survival of Exculpation (Negotiated Clause)

23-070

§23.70

Tenant’s Indemnification of Landlord (Landlord’s Clause)

23-071

§23.71

Tenant’s Indemnification of Landlord (Tenant’s Clause)

23-072

§23.72

Tenant’s Indemnification of Landlord (Negotiated Clause)

23-073

§23.73

Landlord’s Indemnification of Tenant (Tenant’s Clause)

23-074

§23.74

Landlord’s Indemnification of Tenant (Negotiated Clause)

23-075

§23.75

Waiver of Subrogation (Landlord’s Clause)

23-076

§23.76

Waiver of Subrogation (Tenant’s Clause)

23-077

§23.77

Waiver of Subrogation (Negotiated Clause)

23-078

§23.78

Tenant’s Failure to Maintain Insurance (Landlord’s Clause)

23-079

§23.79

Sufficiency of Coverage (Landlord’s Clause)

CH24

Chapter 24

Damage and Destruction

24-026

§24.26

Damage and Destruction (Title of Article)

24-027

§24.27

Waiver of Statutory Termination Rights (Landlord’s and Tenant’s Clause)

24-028

§24.28

Restoration Obligations and Termination Rights (Landlord’s Clause)

24-029

§24.29

Restoration Obligations and Termination Rights (Tenant’s Clause)

24-030

§24.30

Restoration Obligations and Termination Rights (Negotiated Clause)

24-031

§24.31

Restoration Using Revised Plans and Specifications (Negotiated Clause)

24-032

§24.32

Damage Near End of Term (Landlord’s Clause)

24-033

§24.33

Damage Near End of Term (Tenant’s Clause)

24-034

§24.34

Damage Near End of Term (Negotiated Clause)

24-035

§24.35

Damage to Remainder of Shopping Center (Landlord’s Clause)

24-036

§24.36

Damage to Remainder of Shopping Center (Tenant’s Clause)

24-037

§24.37

Damage to Remainder of Shopping Center (Negotiated Clause)

24-038

§24.38

Damage to Remainder of Shopping Center—Tenant’s Right of First Negotiation for Redeveloped Space (Negotiated Clause)

24-039

§24.39

Distribution of Proceeds (Landlord’s Clause)

24-040

§24.40

Distribution of Proceeds (Tenant’s Clause)

24-041

§24.41

Distribution of Proceeds (Negotiated Clause)

24-042

§24.42

Rent Abatement (Landlord’s Clause)

24-043

§24.43

Rent Abatement (Tenant’s Clause)

24-044

§24.44

Rent Abatement (Negotiated Clause)

CH25

Chapter 25

Condemnation

25-012

§25.12

Condemnation (Title of Article)

25-013

§25.13

Definition of Taking (Landlord’s and Tenant’s Clause)

25-014

§25.14

Total Taking (Landlord’s and Tenant’s Clause)

25-015

§25.15

Partial Taking (Landlord’s Clause)

25-016

§25.16

Partial Taking (Tenant’s Clause)

25-017

§25.17

Partial Taking (Negotiated Clause)

25-018

§25.18

Allocation of Condemnation Award (Landlord’s Clause)

25-019

§25.19

Allocation of Condemnation Award (Tenant’s Clause)

25-020

§25.20

Allocation of Condemnation Award (Negotiated Clause)

25-021

§25.21

Continuation of Lease (Landlord’s Clause)

25-022

§25.22

Continuation of Lease (Tenant’s Clause)

25-023

§25.23

Continuation of Lease (Negotiated Clause)

25-024

§25.24

Waiver of Statutory Right to Terminate (Landlord’s Clause)

25-025

§25.25

Waiver of Statutory Right to Terminate (Negotiated Clause)

CH26

Chapter 26

Assignment and Subletting

26-029

§26.29

Assignment and Subletting (Title of Article)

26-030

§26.30

Assignment; Consent Required (Landlord’s Clause)

26-031

§26.31

Assignment (Tenant’s Clause)

26-032

§26.32

Standard for Consent (Landlord’s Clause)

26-033

§26.33

Tenant’s Request (Landlord’s Clause)

26-034

§26.34

Tenant’s Request (Negotiated Clause)

26-035

§26.35

Landlord’s Response (Landlord’s Clause)

26-036

§26.36

Landlord’s Response (Negotiated Clause)

26-037

§26.37

Recapture Limited to Material Change in Use (Negotiated Clause)

26-038

§26.38

Nullification of Recapture (Negotiated Clause)

26-039

§26.39

Transfers to Affiliates (Landlord’s Clause)

26-040

§26.40

Stock Transfers, Mergers, and Consolidations (Negotiated Clause)

26-041

§26.41

Sale of Tenant’s Business (Negotiated Clause)

26-042

§26.42

Transfer to Franchisee (Negotiated Clause)

26-043

§26.43

License and Concession Agreements (Negotiated Clause)

26-044

§26.44

Transfer Premium; Fair Market Rent (Landlord’s Clause)

26-045

§26.45

Shared Transfer Premium (Negotiated Clause)

26-046

§26.46

Tenant’s Remedies (Landlord’s Clause)

26-047

§26.47

Nonrelease (Landlord’s Clause)

26-048

§26.48

Release (Negotiated Clause)

26-049

§26.49

Form and Content of Transfer Instrument (Landlord’s Clause)

26-050

§26.50

Recognition (Landlord’s Clause)

26-051

§26.51

Recognition (Tenant’s Clause)

26-052

§26.52

Recognition (Negotiated Clause)

26-053

§26.53

Reimbursement by Tenant (Landlord’s Clause)

CH27

Chapter 27

Default and Remedies

27-031

§27.31

Defaults by Tenant (Title of Article)

27-032

§27.32

Tenant’s Default (Landlord’s Clause)

27-033

§27.33

Tenant’s Default (Tenant’s Clause)

27-034

§27.34

Tenant’s Default (Negotiated Clause)

27-035

§27.35

Landlord’s Remedies (Landlord’s Clause)

27-036

§27.36

Landlord’s Remedies (Tenant’s Clause)

27-037

§27.37

Landlord’s Remedies (Negotiated Clause)

27-038

§27.38

Right of Landlord to Perform (Landlord’s Clause)

27-039

§27.39

Right of Landlord to Perform (Tenant’s Clause)

27-040

§27.40

Right of Landlord to Perform (Negotiated Clause)

27-041

§27.41

Definition of Rent (Landlord’s and Negotiated Clause)

27-042

§27.42

Waiver of Redemption (Landlord’s Clause)

27-043

§27.43

Right of Redemption (Tenant’s Clause)

27-044

§27.44

Lien Waiver (Tenant’s Clause)

27-045

§27.45

Tenant Financing (Negotiated Clause)

27-046

§27.46

Defaults by Landlord (Title of Article)

27-047

§27.47

Landlord’s Default (Landlord’s Clause)

27-048

§27.48

Landlord’s Default (Tenant’s Clause)

27-049

§27.49

Landlord’s Default (Negotiated Clause)

27-050

§27.50

Tenant’s Remedies (Landlord’s Clause)

27-051

§27.51

Tenant’s Remedies (Tenant’s Clause)

27-052

§27.52

Tenant’s Remedies (Negotiated Clause)

27-053

§27.53

Landlord’s Liability (Landlord’s Clause)

27-054

§27.54

Landlord’s Liability (Negotiated Clause)

27-055

§27.55

Cure by Landlord’s Lender (Landlord’s Clause)

27-056

§27.56

Cure by Landlord’s Lender (Negotiated Clause)

CH28

Chapter 28

Bankruptcy Issues

28-012

§28.12

Attorney Fees

28-013

§28.13

Tenant’s Insolvency (Landlord’s Clause)

28-014

§28.14

Insolvency Default Remedies (Landlord’s Clause)

28-015

§28.15

Lease Assignment in Bankruptcy: Capture of Consideration and Mandatory Assumption (Landlord’s Clause)

CH29

Chapter 29

Title and Quiet Enjoyment

29-014

§29.14

Title and Quiet Enjoyment (Title of Article)

29-015

§29.15

Underlying Documents (Landlord’s Clause)

29-016

§29.16

Title Matters (Tenant’s Clause)

29-017

§29.17

Title Matters (Negotiated Clause)

29-018

§29.18

Covenant of Quiet Enjoyment (Landlord’s Clause)

29-019

§29.19

Covenant of Quiet Enjoyment (Tenant’s Clause)

29-020

§29.20

Covenant of Quiet Enjoyment (Negotiated Clause)

CH30

Chapter 30

Hazardous Materials

30-003

§30.3

Hazardous Materials (Title of Article)

30-004

§30.4

Hazardous Materials; Compliance With Environmental Laws (Landlord’s Clause)

30-005

§30.5

Hazardous Materials; Compliance With Environmental Laws; Landlord’s Representations and Warranties (Tenant’s Clause)

30-006

§30.6

Known Preexisting Conditions (Landlord’s Clause)

30-007

§30.7

Use of Hazardous Materials (Landlord’s Clause)

30-008

§30.8

Environmental Questionnaire and Disclosure Statement (Landlord’s Clause)

30-009

§30.9

Notice (Landlord’s Clause)

30-010

§30.10

Investigation and Remediation (Landlord’s Clause)

30-011

§30.11

Investigation and Remediation—Landlord’s Obligations (Tenant’s Clause)

30-012

§30.12

Indemnification by Tenant (Landlord’s Clause)

30-013

§30.13

Indemnification by Tenant (Tenant’s Clause)

30-014

§30.14

Indemnification by Tenant (Negotiated Clause)

30-015

§30.15

Indemnification by Landlord (Tenant’s Clause)

30-016

§30.16

Asbestos (Landlord’s Clause)

30-017

§30.17

Asbestos (Tenant’s Clause)

30-018

§30.18

Mold (Tenant’s Clause)

30-019

§30.19

Mold (Negotiated Clause)

30-020

§30.20

Termination of Lease (Landlord’s Clause)

CH31

Chapter 31

Promotional Charges and Advertising

31-002

§31.2

Promotional Services and Advertising (Title of Article)

31-003

§31.3

Initial Promotional Assessment (Landlord’s Clause)

31-004

§31.4

Promotional Charge (Landlord’s Clause)

31-005

§31.5

Promotional Charge (Tenant’s Clause)

31-006

§31.6

Promotional Charge (Negotiated Clause)

31-007

§31.7

Required Advertising (Landlord’s Clause)

31-008

§31.8

Shopping Center Credit Card and Gift Cards (Landlord’s Clause)

31-009

§31.9

Shopping Center Credit Card and Gift Cards (Negotiated Clause)

CH32

Chapter 32

Security Deposits and Letters of Credit

32-010

§32.10

Delivery, Holding, and Application of Security Deposit (Landlord’s Clause)

32-011

§32.11

Delivery, Holding, and Application of Security Deposit (Negotiated Clause)

32-012

§32.12

Restoration of Security Deposit (Landlord’s and Negotiated Clause)

32-013

§32.13

Transfer of Security Deposit (Landlord’s Clause)

32-014

§32.14

Transfer of Security Deposit (Negotiated Clause)

32-015

§32.15

Assignment or Encumbrance of Security Deposit (Landlord’s and Negotiated Clause)

32-016

§32.16

Waiver of Statutory Requirements; No Interest on Security Deposit (Landlord’s Clause)

32-017

§32.17

Interest on Security Deposit (Negotiated Clause)

32-018

§32.18

Return of Security Deposit (Landlord’s Clause)

32-019

§32.19

Return of Security Deposit (Negotiated Clause)

32-020

§32.20

Delivery and Holding of Letter of Credit (Landlord’s and Negotiated Clause)

32-021

§32.21

Landlord’s Right to Draw on Letter of Credit (Landlord’s Clause)

32-022

§32.22

Landlord’s Right to Draw on Letter of Credit (Negotiated Clause)

32-023

§32.23

Restoration of Letter of Credit (Landlord’s Clause)

32-024

§32.24

Restoration of Letter of Credit (Negotiated Clause)

32-025

§32.25

Right to Transfer Letter of Credit (Landlord’s Clause)

32-026

§32.26

Right to Transfer Letter of Credit (Negotiated Clause)

32-027

§32.27

Assignment or Encumbrance of Letter of Credit (Landlord’s and Negotiated Clause)

32-028

§32.28

Periodic Reduction of Letter of Credit (Negotiated Clause)

32-029

§32.29

Letter of Credit Is Not Security Deposit (Landlord’s Clause)

32-029A

§32.29A

Non-Interference by Tenant (Landlord’s Clause)

32-029B

§32.29B

Waiver of Certain Relief (Landlord’s Clause)

32-029C

§32.29C

Remedy for Improper Drafts (Landlord’s Clause)

32-030

§32.30

Form: Letter-of-Credit Exhibit (Landlord’s Exhibit)

CH33

Chapter 33

Holding Over and Surrender of Premises

33-015

§33.15

Surrender of Premises (Landlord’s Clause)

33-016

§33.16

Surrender of Premises (Tenant’s Clause)

33-017

§33.17

Surrender of Premises (Negotiated Clause)

33-018

§33.18

No Implied Acceptance of Surrender (Landlord’s Clause)

33-019

§33.19

No Implied Surrender or Acceptance of Surrender (Tenant’s and Negotiated Clause)

33-020

§33.20

Holding Over (Landlord’s Clause)

33-021

§33.21

Holding Over (Tenant’s Clause)

33-022

§33.22

Holding Over (Negotiated Clause)

CH34

Chapter 34

Mechanics Liens

34-007

§34.7

Mechanics Liens (Landlord’s Clause)

34-008

§34.8

Mechanics Liens (Tenant’s Clause)

34-009

§34.9

Mechanics Liens (Negotiated Clause)

CH35

Chapter 35

Nonwaiver

35-002

§35.2

Nonwaiver; No Accord and Satisfaction (Landlord’s Clause)

35-003

§35.3

Nonwaiver (Tenant’s Clause)

35-004

§35.4

Nonwaiver; No Accord and Satisfaction (Negotiated Clause)

CH36

Chapter 36

Alternative Dispute Resolution

36-007

§36.7

Negotiation (Landlord’s and Tenant’s Clause)

36-008

§36.8

Mediation (Landlord’s and Tenant’s Clause)

36-009

§36.9

Arbitration (Landlord’s and Tenant’s Clause)

36-010

§36.10

Qualifications of Arbitrators (Landlord’s and Tenant’s Clause)

36-011

§36.11

Venue (Landlord’s and Tenant’s Clause)

36-012

§36.12

Demand and Limitation on Claims (Landlord’s and Tenant’s Clause)

36-013

§36.13

Provisional Remedies (Landlord’s and Tenant’s Clause)

36-014

§36.14

Discovery (Landlord’s and Tenant’s Clause)

36-015

§36.15

Application of California Evidence Code (Landlord’s and Tenant’s Clause)

36-016

§36.16

Cost of Arbitration and Attorney Fees (Landlord’s and Tenant’s Clause)

36-017

§36.17

Notice (Landlord’s and Tenant’s Clause)

36-018

§36.18

Reference (Landlord’s and Tenant’s Clause)

CH37

Chapter 37

Attorney Fees

37-007

§37.7

Form: Attorney Fees and Costs (Landlord’s and Tenant’s Clause

CH38

Chapter 38

Miscellaneous Clauses and Execution of Lease

38-003

§38.3

Miscellaneous (Title of Article)

38-004

§38.4

Notices (Landlord’s Clause)

38-005

§38.5

Notices (Tenant’s and Negotiated Clause)

38-006

§38.6

Force Majeure (Landlord’s Clause)

38-007

§38.7

Force Majeure (Tenant’s Clause)

38-008

§38.8

Force Majeure (Negotiated Clause)

38-009

§38.9

Confidentiality (Landlord’s Clause)

38-010

§38.10

Confidentiality (Tenant’s and Negotiated Clause)

38-011

§38.11

Entire Agreement; Amendments (Landlord’s and Tenant’s Clause)

38-012

§38.12

Governing Law; Venue (Landlord’s and Tenant’s Clause)

38-013

§38.13

Binding Effect (Landlord’s and Tenant’s Clause)

38-014

§38.14

Brokers (Landlord’s and Tenant’s Clause)

38-015

§38.15

Merger (Landlord’s and Tenant’s Clause)

38-016

§38.16

Proper Authority (Landlord’s and Tenant’s Clause)

38-017

§38.17

Transfer of Landlord’s Interest (Landlord’s Clause)

38-018

§38.18

Transfer of Landlord’s Interest (Tenant’s and Negotiated Clause)

38-019

§38.19

Interest Rate (Landlord’s and Tenant’s Clause)

38-020

§38.20

Waiver of Jury Trial (Landlord’s and Tenant’s Clause)

38-021

§38.21

Security (Landlord’s and Tenant’s Clause)

38-022

§38.22

Anti-Terrorism Representations (Landlord’s and Tenant’s Clause)

38-023

§38.23

Exhibits (Landlord’s and Tenant’s Clause)

38-024

§38.24

Joint and Several Liability (Landlord’s and Tenant’s Clause)

38-025

§38.25

When Lease Becomes Binding (Landlord’s and Tenant’s Clause)

38-026

§38.26

Word Usage (Landlord’s and Tenant’s Clause)

38-027

§38.27

Captions (Landlord’s and Tenant’s Clause)

38-028

§38.28

Counting Days (Landlord’s and Tenant’s Clause)

38-029

§38.29

Reasonableness and Good Faith (Landlord’s and Tenant’s Clause)

38-029A

§38.29A

Time of the Essence (Landlord’s and Tenant’s Clause)

38-030

§38.30

Partial Invalidity (Landlord’s and Tenant’s Clause)

38-030A

§38.30A

Certified Access Specialist (CASp) Disclosure (Landlord’s and Tenant’s Clause)

38-031

§38.31

Credit Report (Landlord’s Clause)

38-032

§38.32

Credit Report (Negotiated Clause)

38-033

§38.33

Service Charges (Landlord’s Clause)

38-034

§38.34

Service Charges (Negotiated Clause)

38-035

§38.35

Right to Lease (Landlord’s Clause)

38-036

§38.36

Right to Lease (Negotiated Clause)

38-037

§38.37

Landlord’s Access (Landlord’s Clause)

38-038

§38.38

Landlord’s Access (Negotiated Clause)

38-039

§38.39

Construction Activities and Screening (Landlord’s Clause)

38-040

§38.40

Construction Activities and Screening (Negotiated Clause)

38-040A

§38.40A

Independent Covenants (Landlord’s Clause)

38-040B

§38.40B

Independent Covenants (Negotiated Clause)

38-040C

§38.40C

Modifications Required by Landlord’s Lender (Landlord’s Clause)

38-040D

§38.40D

Modifications Required by Landlord’s Lender (Negotiated Clause)

38-041

§38.41

Execution by Limited Liability Company (Landlord’s and Tenant’s Signature Block)

38-042

§38.42

Execution by Corporation (Landlord’s and Tenant’s Signature Block)

38-043

§38.43

Execution by General or Limited Partnership (Landlord’s and Tenant’s Signature Block)

38-044

§38.44

Execution for Party Entity by Another Entity (Landlord’s and Tenant’s Signature Block)

38-045

§38.45

Execution by Natural Person (Landlord’s and Tenant’s Signature Block)

38-046

§38.46

Execution by Trust (Landlord’s and Tenant’s Signature Block)

CH40

Chapter 40

Rules and Regulations

40-010

§40.10

Rules and Regulations (Landlord’s Clause)

40-010A

§40.10A

Rules and Regulations (Tenant's Form)

40-011

§40.11

Rules and Regulations (Negotiated Clause)

40-012

§§40.12-40.30

Title of Exhibit (Landlord’s Clause)

 

§40.13

Introductory Clause (Landlord’s Clause)

 

§40.14

Staffing Premises (Landlord’s Clause)

 

§40.15

Lighting (Landlord’s Clause)

 

§40.16

Maintenance (Landlord’s Clause)

 

§40.17

Retail Merchandise (Landlord’s Clause)

 

§40.18

Office or Other Nonsales Space (Landlord’s Clause)

 

§40.19

Trash (Landlord’s Clause)

 

§40.20

Manner of Use of Premises (Landlord’s Clause)

 

§40.21

Loitering (Landlord’s Clause)

 

§40.22

Damage and Defacement (Landlord’s Clause)

 

§40.23

Awnings and Curtains (Landlord’s Clause)

 

§40.24

Machinery With Certain Effects Prohibited (Landlord’s Clause)

 

§40.25

Permitted Equipment (Landlord’s Clause)

 

§40.26

Interference With Other Tenants or Patrons; Animals; Vehicles (Landlord’s Clause)

 

§40.27

Movement of Freight (Landlord’s Clause)

 

§40.28

Landlord’s Right to Exclude (Landlord’s Clause)

 

§40.29

Landlord’s Right to Close Shopping Center (Landlord’s Clause)

 

§40.30

Modifications to Rules and Regulations (Landlord’s Clause)

CH41

Chapter 41

Estoppel Certificates

41-012

§41.12

Estoppel Certificate (Landlord’s Clause)

41-013

§41.13

Estoppel Certificate (Tenant’s Clause)

41-014

§41.14

Estoppel Certificate (Negotiated Clause)

41-015

§41.15

Estoppel Certificate (Landlord’s Exhibit)

41-016

§41.16

Estoppel Certificate (Tenant’s Exhibit)

CH42

Chapter 42

Guaranty of Lease

42-019

§42.19

Guaranty Required (Landlord’s Clause)

42-020

§42.20

Guaranty Required (Tenant’s and Negotiated Clause)

42-021

§§42.21-42.40

Introduction and Recitals (Landlord’s and Guarantor’s Clause)

 

§42.22

Nature of Guaranty (Landlord’s Clause)

 

§42.23

Nature of Guaranty (Guarantor’s Clause)

 

§42.24

Effect of Lease Modifications; Continuing Guaranty (Landlord’s Clause)

 

§42.25

Effect of Lease Modifications (Guarantor’s Clause)

 

§42.26

Waiver of Guarantor’s Rights (Landlord’s Clause)

 

§42.27

Reservation of Guarantor’s Rights (Guarantor’s Clause)

 

§42.28

Waiver of Subrogation (Landlord’s Clause)

 

§42.29

Rights Are Cumulative (Landlord’s Clause)

 

§42.30

Successors and Assigns (Landlord’s and Guarantor’s Clause)

 

§42.31

Bankruptcy Concerns (Landlord’s Clause)

 

§42.32

Bankruptcy Concerns (Guarantor’s Clause)

 

§42.33

Financial Statements (Landlord’s Clause)

 

§42.34

Financial Statements (Guarantor’s Clause)

 

§42.35

Waiver of Jury Trial (Landlord’s and Guarantor’s Clause)

 

§42.36

Choice of Law, Jurisdiction, Forum, Venue (Landlord’s Clause)

 

§42.37

Choice of Law (Guarantor’s Clause)

 

§42.38

Revival of Guaranty (Landlord’s and Guarantor’s Clause)

 

§42.39

Miscellaneous Clauses (Landlord’s and Guarantor’s Clauses)

 

§42.40

Signature Blocks (Landlord’s and Guarantor’s Clause)

CH43

Chapter 43

Memorandum of Lease

43-006

§43.6

Recordation of Lease (Landlord’s Clause)

43-007

§43.7

Recordation of Lease (Tenant’s and Negotiated Clause)

43-008

§43.8

Memorandum of Lease (Tenant’s and Negotiated Exhibit)

CH44

Chapter 44

Subordination, Nondisturbance, and Attornment

44-018

§44.18

Subordination, Attornment, and Estoppel Certificate (Title of Article)

44-019

§44.19

Subordination to Loans (Landlord’s Clause)

44-020

§44.20

Subordination to Loans; Nondisturbance Agreements (Tenant’s Clause)

44-021

§44.21

Subordination to Loans; Nondisturbance Agreements (Negotiated Clause)

44-022

§44.22

Attornment (Landlord’s Clause)

44-023

§44.23

Attornment (Tenant’s and Negotiated Clause)

APP

Appendixes

APPENDIXES

APP-A

APP-A

Sample Letter of Intent (Negotiated Form)

APP-B

APP-B

Retail Lease (Landlord’s Form)

APP-C

APP-C

Form of Retail Lease (Tenant)

APP-D

APP-D

Sample Work Letter (Construction Exhibit) (Negotiated Form)

APP-E

APP-E

Sample Rules and Regulations

 

Selected Developments

November 2019 Update

Book Enhancements and New Form

  • Appendixes B and C of this book and sample clauses in several chapters have been updated to reflect changes in lease language.

  • Several sections of chap 7 have been revised to reflect the changing attitudes to cotenancy requirements as brick and mortar retailers continue to decline under pressure from online retailers.

Legislation

  • CALGreen. The CALGreen Code (Part 11 of Title 24 of the California Code of Regulations) has been updated effective January 1, 2020. See §§21.3, 24.17A.

  • Eviction Notice. Effective September 1, 2019, the 3-day notice that a landlord must provide to a tenant for purposes of eviction under CCP §1161 must exclude Saturdays, Sundays, and judicial holidays. See AB 2343 (Stats 2018, ch 260). See §§27.4–27.9, 27.12, 27.32, 38.4.

Cases

  • Exclusive Use; Fraud in Inducement. Orozco v WPV San Jose, LLC (2019) 36 CA5th 375 (both lease and guaranty were rescindable based on landlord’s fraudulent misrepresentation that no restaurants with similar concept to tenant would be included in shopping center). See §§19.1, 19.10, 42.4.

  • Liability Insurance. Thee Sombrero, Inc. v Scottsdale Ins. Co. (2018) 28 CA5th 729 (strictly economic losses such as lost profits, loss of goodwill, loss of anticipated benefit of bargain, and loss of investment do not constitute damage or injury to tangible property under CGL policy). See §23.5.

  • Adhesion Contracts. Hass v RhodyCo. Prods. (2018) 26 CA5th 11 (after death of marathon runner, court disallowed action for ordinary negligence under race release, but allowed claim of gross negligence in providing emergency medical services). See §23.29.

  • Indemnification. Centex Homes v R-Help Constr. Co., Inc. (2019) 32 CA5th 1230 (when plaintiff’s complaint alleges facts “embraced” by indemnity agreement, indemnitor has duty to defend throughout underlying tort action unless it can conclusively show by undisputed act that plaintiff’s action was not covered by agreement). See §§23.34, 23.70.

  • Condemnation; Loss of Goodwill. Los Angeles County Metro. Transp. Auth. v Yum Yum Donut Shops, Inc. (2019) 32 CA5th 662 (business owner entitled to compensation for loss of goodwill, despite failing to mitigate loss by moving to alternative location; costs of relocation were not reimbursable and impact of costs on goodwill was quantifiable); Thee Aguila, Inc. v Century Law Group, LLP (2019) 37 CA5th 22 (despite language of lease, landlord cannot claim tenant’s award for loss of goodwill). See §25.7.

  • Arbitrability of Disputes. Henry Schein, Inc. v Archer & White Sales, Inc. (2019) ___ US ___, 139 S Ct 524 (under Federal Arbitration Act, issue of whether dispute is subject to binding arbitration is decided by arbitrator, not courts, when parties have so agreed in underlying contract, even when there are no grounds to support claim that dispute falls within types of claims that are subject to binding arbitration agreement). See §§36.3, 36.9.

  • Lease Guaranty; Attorney Fees. Orozco v WPV San Jose, LLC (2019) 36 CA5th 375 (lease guarantor could recover attorney fees based on “expansive” language of fee provision, but tenant could not recover under fee clause that was not “broadly worded”). See §§37.1, 37.5, 42.3.

About the Authors

C. GREGG ANKENMAN, coauthor of chaps 3, 5, 9, 17, and 31, received his B.A. from Brigham Young University and his J.D. from the University of California School of Law, Berkeley. Mr. Ankenman has been active in the National Retail Tenants Association (NRTA) since its inception and serves as the NRTA’s general counsel. He practices real estate law, with an emphasis on commercial leasing, at Wendel, Rosen, Black & Dean LLP, Oakland.

JONATHAN H. BAUMAN, coauthor of chaps 5, 34, and 38, received his A.B. from Brown University, magna cum laude, and his J.D. from Stanford Law School. He specializes in the areas of retail development and real estate transactions and is Vice President-Leasing Counsel at BentleyForbes, Los Angeles.

STUART I. BLOCK, coauthor of chap 30, received his B.A. from Stanford University, with honors, and his J.D. from the University of California School of Law, Los Angeles. He focuses on environmental law, particularly brownfield redevelopment and related litigation, at Cox, Castle & Nicholson LLP, San Francisco.

ESTELLE M. BRAAF, author of chaps 35–37 and coauthor of chap 27, received her B.A. from City University of New York (Brooklyn College) and her J.D. from the University of Southern California. She practices in the areas of landlord-tenant, commercial lease, and business litigation at Cox, Castle & Nicholson LLP, Los Angeles.

JESS R. BRESSI, author of chap 28, received his B.S. from California State University (Northridge) and his J.D. from Southwestern University. Mr. Bressi is a member of the board of directors of the Orange County Bankruptcy Forum. He practices in the areas of commercial litigation and bankruptcy at Cox, Castle & Nicholson LLP, Irvine.

SCOTT D. BROOKS, coauthor of chaps 32, 39, and 41, received his B.A. from Cornell University, cum laude, and his J.D. from Yale University. He practices transactional real estate law, with an emphasis on commercial leasing and development, at Cox, Castle & Nicholson LLP, San Francisco.

GREGORY D. CALL, coauthor of chap 15, received his B.A. from Stanford University, with distinction, and his M.A. and J.D. from the University of California School of Law, Berkeley. Mr. Call is a frequent speaker and author for the National Retail Tenants Association (NRTA) and the International Council of Shopping Centers (ICSC). He is chair of the litigation department at Folger, Levin & Kahn, San Francisco.

KEVIN D. CATON, coauthor of chap 15, received his B.A. with honors from Williams College and his J.D. from the University of California School of Law, Los Angeles. Mr. Caton practices in areas of complex litigation and retail law with Folger, Levin & Kahn, San Francisco. He is also a speaker and author on retail issues through the National Retail Tenants Association (NRTA).

ELIZABETH CLARK, coauthor of chaps 4 and 19, received her B.A. from City University of New York (Hunter College) and her J.D. from Columbia University. She practices real estate law at Fitzgerald, Abbott & Beardsley LLP, Oakland.

ANDRÉA D. COHEN, coauthor of chaps 14, 33, and 40, received her B.A. from the University of California School of Law, Los Angeles, and her J.D. from the University of Southern California. She practices real estate law at Friedman & Solomon, Beverly Hills.

MICHAEL A. DEAN, author of chap 1, received his A.B. from San Jose State College and his J.D. from the University of California School of Law, Berkeley. Mr. Dean is a member of the American College of Real Estate Lawyers and of the International Council of Shopping Centers (ICSC). He practices in the areas of commercial leasing, finance, and purchase and sales at Wendel, Rosen, Black & Dean LLP, Oakland.

GARY A. GLICK, coauthor of chaps 4, 9, 19, and 27, received his B.A. from the University of Rochester, cum laude, and his J.D. from Loyola Law School of Los Angeles. Mr. Glick is the former chairperson of the Western Division Governmental Relations Committee of the International Council of Shopping Centers (ICSC), is currently a member of the ICSC Southern California Program Committee, and has taught at The University of Shopping Centers. He practices law, specializing in shopping center development and commercial leasing, at Cox, Castle & Nicholson LLP, Los Angeles.

SCOTT L. GROSSFELD, coauthor of chaps 3, 14, 16, and 18, received his B.A. from the University of Michigan, with distinction, and his J.D. from the University of Southern California, Order of the Coif. Mr. Grossfeld is a member of the International Council of Shopping Centers (ICSC). He specializes in retail development and real estate at Cox, Castle & Nicholson LLP, Los Angeles.

RICHARD J. KAISER, coauthor of chaps 7, 17, and 30, received his B.A. from the University of Michigan and his M.B.A. and J.D. from Indiana University. He practices in the Industrial/Commercial/Retail Group of the Panattoni Law Firm, Irvine.

PATRICIA A. KIM, coauthor of chap 33, received her A.B. from the University of California, Berkeley, with honors, and her J.D. from the University of Southern California. Ms. Kim is a broker member of the Bay East Association of Realtors and a member of the International Council of Shopping Centers (ICSC). She practices real estate transactional law, with an emphasis on commercial retail and office leasing, real property acquisition, and development, at Wendel, Rosen, Black & Dean LLP, Oakland.

HANS D. LAUTERBACH, author of chap 24 and coauthor of chaps 11 and 26, received his B.A. from the University of California, Santa Barbara, and his J.D. from the University of San Diego, magna cum laude. Mr. Lauterbach is a member of the International Council of Shopping Centers (ICSC). He specializes in the area of shopping center development at Cox, Castle & Nicholson LLP, Irvine.

CAROLYN V. LUONG, author of chap 25 and coauthor of chaps 6 and 10, received her A.B. from the University of California, Berkeley, and her J.D. from the University of California School of Law, Los Angeles. She practices in the areas of office, retail, and industrial leasing, finance, and purchase and sale agreements at Garrett, DeFrenza & Stiepel LLP, Costa Mesa.

STATHI G. MARCOPULOS, coauthor of chaps 13, 15, 29, and 38, received his B.A. from Stanford University, with distinction, and his J.D. from the University of California School of Law, Los Angeles. Mr. Marcopulos is an active member of the Building Industry Association (BIA) and the International Council of Shopping Centers (ICSC). He specializes in the areas of commercial real estate acquisition, disposition, leasing, development, and finance at Cox, Castle & Nicholson LLP, Irvine.

JEFFREY D. MASTERS, coauthor of chap 23, received his B.A. and M.B.A. from the University of California, Los Angeles, and his J.D. from the University of California School of Law, Los Angeles. He is co-chair of the Development Risk Management Practice Group at Cox, Castle & Nicholson LLP, Los Angeles.

JAMES R. McCOY, JR., author of chap 43 and coauthor of chaps 13 and 38, received his B.S. from California State University, Northridge, and his J.D. from Loyola Law School. Mr. McCoy is the President of Newsong Real Estate Advisors, Inc., a commercial and investment real estate brokerage and advisement firm located in San Clemente.

MYRA S. MITZMAN, coauthor of chap 8, received her B.A. from Pace University and her J.D. from Fordham University, cum laude. Ms. Mitzman represents lenders, commercial property owners, and real estate developers in all facets of real estate leasing, acquisition, disposition, and finance as principal of the Law Office of Myra S. Mitzman, Oakland.

DANIEL B. MYERS, coauthor of chaps 22, 41, and 44, received his A.B. from the University of California, Berkeley, and his J.D. from Santa Clara University, summa cum laude. Mr. Myers is a member of the Urban Land Institute and the International Council of Shopping Centers (ICSC). He practices in the areas of real estate and land use at Wendel, Rosen, Black & Dean LLP, Oakland.

MATTHEW D. OLSAN, coauthor of chaps 7 and 18, received his B.A. from the University of Southern California and his J.D. from the University of California, Hastings College of the Law. Mr. Olsan is a member of the International Council of Shopping Centers (ICSC) and co-chair of the Real Estate Finance Subsection of The State Bar of California. He practices real estate law, with an emphasis on commercial leasing, finance, joint venture transactions, and real estate acquisitions and dispositions at The Real Estate Law Group, Sausalito.

NEAL A. PARISH, coauthor of chaps 14 and 20, received his B.A. from the University of California, Los Angeles, his Master of City Planning, M.S., Transportation Engineering from the University of California, Berkeley, and his J.D. from the University of California School of Law, Berkeley. Mr. Parish is chair of the City of Oakland Landmarks Preservation Advisory Board. He specializes in real estate, land use, and public agency law at Wendel, Rosen, Black & Dean LLP, Oakland.

REBECCA L. POWLAN, coauthor of chaps 21 and 33, received her B.A. from the University of California, Santa Barbara, and her J.D. from the University of the Pacific, McGeorge School of Law. Ms. Powlan is a member of the California Business Properties Association and the International Council of Shopping Centers (ICSC). Her practice focuses on commercial real estate leasing, real property purchases and dispositions, and development and shopping center operating and easement agreements at Wendel, Rosen, Black & Dean LLP, Oakland.

MATTHEW P. SEEBERGER, coauthor of chaps 8, 20, and 23, received his B.A. from Swarthmore College and his J.D. from Ohio State University. He practices in the area of real estate acquisitions and dispositions and landlord and tenant leasing at Cox, Castle & Nicholson LLP, Los Angeles.

STEPHANIE J. SHIEH, coauthor of chaps 12, 18, and 21–22, received her A.B. from the University of California, Berkeley, and her J.D. from the University of California, Hastings College of the Law. Ms. Shieh previously worked in private practice conducting both real estate litigation and transactional work. She is a member of the International Council of Shopping Centers (ICSC) and is currently Real Estate Counsel at Westfield, LLC, Los Angeles.

CAROLYN J. STEIN, coauthor of chaps 3, 16, 19, 27, 29, and 40, received her B.A. from California State University, Hayward, and her J.D. from the University of California School of Law, Berkeley. Ms. Stein was formerly a real estate attorney with Shorenstein Company and with Wendel, Rosen, Black & Dean LLP, Oakland. She is currently a Deputy City Attorney with the Real Estate and Finance Team in the Office of the City Attorney of San Francisco.

JENNIFER STEINDLER, coauthor of chaps 31 and 39, received her B.A. from the State University of New York (Albany) and her J.D. from the University of Pittsburgh School of Law. Ms. Steindler was previously corporate counsel at Gap, Inc., where she handled construction issues and lease negotiations for Gap, Banana Republic, and Old Navy, and at Nike Retail Services, Inc., where she negotiated international leases. She is currently Assistant General Counsel at Kenneth Cole Productions, Inc., New York.

ROBERT J. SYKES, author of chap 2 and coauthor of chaps 6, 10–11, and 26, received his B.B.A. from the University of Washington, magna cum laude, and his J.D. from the University of California School of Law, Los Angeles, Order of the Coif. Mr. Sykes is a Certified Public Accountant and a member of the International Council of Shopping Centers (ICSC). He is a specialist in commercial property acquisition, development (including redevelopment), leasing, and construction at Cox, Castle & Nicholson LLP, Irvine.

DANIEL J. VILLALPANDO, author of chap 42 and coauthor of chaps 12 and 44, received his B.A. from Amherst College and his J.D. from the University of California School of Law, Los Angeles. Mr. Villalpando is a member of the Association of Corporate Real Estate Executives and the International Council of Shopping Centers (ICSC). He practices real estate law at Cox, Castle & Nicholson LLP, Los Angeles.

KIMBERLY A. WEBER, coauthor of chaps 30 and 34, received her A.B. from the University of California, Berkeley, and her J.D. from the University of California School of Law, Berkeley. She is Assistant General Counsel, specializing in real estate transactions, of Braddock & Logan Services, Inc., Danville.

JULIA L. WHITELAW, coauthor of chap 39, received her B.A. from Middlebury College and her J.D. from the University of California School of Law, Berkeley. She practices family law with The Law Offices of Bley & Bley, San Francisco.

TIMOTHY S. WILLIAMS, coauthor of chaps 12 and 32, received his B.A. from Stanford University and his J.D. from the University of California School of Law, Berkeley. He specializes in real estate transactions at Wendel, Rosen, Black & Dean LLP, Oakland.

About the 2019 Update Authors

C. GREGG ANKENMAN, update author of chaps 1 and 31; see biography in the About the Authors section of this book.

TODD W. BAXTER, update author of chaps 23 and 37, received his B.S. from the University of Wisconsin and his J.D. from the University of Nebraska College of Law. He specializes in appellate litigation, insurance coverage, and insurance bad faith litigation at McCormick, Barstow, Sheppard, Wayte & Carruth LLP, Fresno.

GREGGORY C. BRANDT, update author of chaps 5, 17, and 30, received his B.S. from California State University, Long Beach, and his J.D. from Loyola Law School, Los Angeles. He practices environmental law at Wendel Rosen LLP, Oakland, and is the chair of the firm’s Environmental Practice Group.

STEPHEN T. BRINDLE, update author of chap 3, received his B.A. from the University of California, Santa Cruz, and his J.D. from Golden Gate University School of Law, with honors. He specializes in real property law.

ANDREW DEMIRCHYAN, update author of chap 26, received his B.A., magna cum laude and his M.A., magna cum laude, from the University of California, Berkeley. He received his J.D. from the University of California, Hastings College of the Law. Mr. Demirchyan practices law with Allen Matkins Leck Gamble Mallory & Natsis LLP, San Francisco, where he specializes in property management, residential and commercial real estate transactions, real estate development, and retail and mixed-use leasing.

KATIE FERRIER, update author of chap 9, received her B.S., magna cum laude, from the University of California, San Diego, and her J.D. from the University of California, Berkeley, School of Law. She practices real estate law at Wendel Rosen LLP, Oakland.

KATIE ROWE JONES, update author of chap 4, received her B.A. from the University of California, Santa Barbara, and her J.D. from the University of California, Davis, School of Law. She is an attorney at Miller Starr Regalia, Walnut Creek, where she practices in real estate transactions with a focus on retail leasing and purchase and sales.

MATTHEW J. MARINO, update author of chaps 11 and 42, received his A.B., cum laude, from Princeton University and his J.D., cum laude, from Georgetown University. He practices in the areas of business and real estate litigation at Allen Matkins Leck Gamble Mallory & Natsis LLP, San Diego.

JAMES R. McCOY, JR., update author of chap 38; see biography in the About the Authors section of this book.

INGA M. MILLER, update author of chap 2, received her B.A. from the University of California, Santa Cruz, and her J.D. from Southwestern Law School, Los Angeles. She is the principal at Miller Property Law, Orinda, where she specializes in structuring entities and real estate deals.

MYRA S. MITZMAN, update author of chaps 7 and 27; see biography in the About the Authors section of this book.

GARRET D. MURAI, update author of chaps 21 and 39, received his B.A. from the University of California, Davis, and his J.D. from the Santa Clara University School of Law. He is a partner at Wendel Rosen LLP, Oakland, and specializes in construction, real estate, and business law.

DANIEL B. MYERS, update author of chaps 13, 22, 41, and 44; see biography in the About the Authors section of this book.

KATHERINE R. OBERLE, update author of chaps 6 and 19, received her B.A. from Excelsior College in New York and her J.D. from the University of California, Hastings College of the Law. She is a senior counsel at Bartko, Zankel, Bunzel & Miller, San Francisco, where her practice focuses on retail, office, and telecommunications leasing.

NEAL A. PARISH, update author of chaps 14, 16, 20, 29, 33, and 40, received his B.A. from the University of California, Los Angeles, his Master of City Planning, M.S., Transportation Engineering degree from the University of California, Berkeley, and his J.D. from the University of California, Berkeley, School of Law. Mr. Parish specializes in real estate, land use, and public agency law at Wendel Rosen LLP, Oakland. For private industry and individual clients, he negotiates and analyzes real estate contracts, including leases, purchase and sale contracts, and easements. In addition, he assists a variety of clients with land use and permitting issues. He also served as chair of the City of Oakland Landmarks Preservation Advisory Board.

MICHAEL G. ROBINSON, update author of chaps 8 and 18, received his B.S. from the University of Southern California and his J.D. from Pepperdine University School of Law. He practices in the area of commercial real estate transactions, with a focus on regional shopping center development, acquisition, leasing, and financing, at Buckner, Robinson & Mirkovich, Costa Mesa.

SCOTT W. SINGER, update author of chaps 34 and 35, received his B.S. from the University of California, Riverside, and his J.D. from Southwestern University School of Law. He practices in the areas of commercial real estate and corporate law at Ring Hunter Holland & Schenone, LLP, Lafayette.

MONICA SLOBODA, update author of chaps 10 and 15, received her B.A. from Mills College and her J.D. from the University of California, Berkeley, School of Law. She practices in the area of commercial real estate at T-Mobile, Concord.

MICHAEL WIENER, update author of chap 12, received his B.A., with honors, from Columbia University and his J.D. and LL.M. from New York University School of Law. He practices law with Greenberg Glusker Fields Claman & Machtinger LLP, Los Angeles, where he advises clients on tax, real estate and corporate aspects of complex business transactions involving partnerships, limited liability companies, trusts and corporations, as well as representing clients in proceedings before the United States Tax Court, the Internal Revenue Service, and the California Franchise Tax Board.

JO ANN WOODSUM, update author of chap 32, received her B.A. from Dartmouth College, her M.A. from the University of California, Los Angeles, and her J.D. from the University of Pennsylvania Law School. She is the principal of The Law Offices of Jo Ann Woodsum, Truckee and San Francisco, and is a commercial real estate leasing attorney with extensive experience negotiating and drafting lease documentation for a variety of clients from large pension fund advisers to small real estate investment companies, as well as retail and high tech tenants.

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