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Supreme Court Favors Property Owner Rights in Development Challenge 

In June, the U.S. Supreme Court issued a significant decision concerning inverse condemnation, or regulatory takings, in the case of Palazzolo v. Rhode Island. The ruling states that acquisition of property with notice of a prior regulation restricting its use

Swap Rent for Dot-Com Stock? Ask Tough Questions Before Proceeding 

With the explosion of dot com and high tech companies, some property owners are experiencing a new phenomenon tenants offering stock options or warrants in lieu of other forms of payment for lease transactions. This trend raises legal and business

Retro Rejection 

When tenants file for Chapter 11 bankruptcy both landlords' and tenants' rights and responsibilities come under the purview of the U.S. Bankruptcy Code. Landlords cannot evict tenants in bankruptcy absent relief from the automatic stay, and tenants must continue to

Risk vs. Reward 

Today’s economic climate has forced both public and private sectors to think outside the proverbial box to come up with innovative financing strategies. One strategy that has recently gained popularity is the sale leaseback. The mechanics of a sale leaseback

U.S. Supreme Court Takes Another Look at Regulatory Takings 

The landmark 1994 U.S. Supreme Court decision of Dolan v. City of Tigard established the "rough proportionality" test for determining whether government regulation of land is so intrusive as to constitute a taking for which compensation must be made. In

States Speak Out on Free Speech in Malls 

Across the country, courts have weighed the right of free speech against private property rights with differing results. While the majority view says that speech is not protected on private property, some courts have held that free speech exercised in

Exclusive-Use Covenants Often Restrict Retail Leases 

Exclusives, or restrictions imposed upon the permitted activities of tenants for the benefit of an anchor or other significant tenant, are fairly common in retail leases. A recent case decided by the U.S. Court of Appeals for the District of

Fair Housing 

The federal Fair Housing Act, as amended, makes it unlawful to discriminate in the sale or rental of a dwelling to any prospective purchaser or tenant. This prohibition includes making a dwelling unavailable to the prospective purchaser or tenant. Obviously,

Courts Examine Brokers' Fiduciary Duties 

Once an owner hires a broker to sell or lease a property, a fiduciary relationship is established. The term fiduciary describes a position of trust The broker owes the seller loyalty and a duty to act in good faith during

Electronic Signature Advances Will Facilitate Online Business 

The world of electronic transactions has galloped far beyond the efforts of the legal community to develop laws that facilitate traffic on the Internet. Recently, Congress gave an unequivocal green light to those exploring the realm of electronic commerce. While

Guide to Green 

The perfect example of local government hurdles to green building leapt off the newspaper page a few months ago. Former Vice President Al Gore filed a plan with the municipality of Belle Meade, Tenn., to install solar panels on the

Greening Up 

In February, San Francisco Mayor Edwin Lee signed into law the San Francisco Existing Commercial Buildings Energy Performance Ordinance, requiring commercial building owners to file annual energy benchmark reports and to conduct more extensive energy audits every five years. New

Reexamine Leases in Light of Heightened Security Concerns 

The criteria for leasing suitable office space used to be straightforward and well understood location, location, location. However, concerns raised by last year's terrorist attacks may affect numerous aspects of the leasing process. Allocations of risk and responsibility between landlords

Recent Court Decisions Help Real Estate Pros Avoid Litigation 

At the end of the year, it is helpful to revisit legal issues concerning commercial real estate by reviewing new court decisions that further the debate on these topics. Both of the examples cited here continue themes discussed in earlier

Recapture Clauses Help Landlords Retain Control of Properties 

Assignment and recapture clauses often are debated during negotiation of commercial real estate leases, and the relationship between the two is intertwined. In deciding whether to consent to assignments of tenants' leasehold interests, landlords frequently are required by law or

Protecting Possession 

Subtenants that do not employ mechanisms to protect their interests could face devastating consequences if a sublandlord files for bankruptcy protection. In such situations, bankruptcy law can operate to terminate subtenants' rights to possession. In a California case on this

Ruling Raises Issues About Who Pays CERCLA Cleanup Costs 

Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 to make those who created environmentally impacted properties responsible for cleaning them up. In particular, CERCLA allows current property owners to recover full or partial cleanup costs from

Insurance Companies Tighten Coverage for Mold-Related Damages 

The recent anthrax scare amply illustrates the potentially devastating health risks posed by biological contaminants. It also underscores the reality that remediation of contaminated buildings is costly and disruptive. Terrorism aside, many in the legal and insurance industries herald toxic

Obtaining Permission 

When commercial real estate projects affect streams, wetlands, or other bodies of water that fall under the Clean Water Act's jurisdiction, generally developers cannot discharge dredged or fill material into the waters until they obtain a CWA Section 404 permit

More States Favor Mutually Dependent Covenants Rule in Commercial Leases 

In most states, commercial property leases adhere to the independent covenants rule, whereby landlords' and tenants' obligations are independent of one another. Thus, a tenant is expected to pay rent even if the landlord fails to uphold some of its

New Legislation Encourages Developers to Clean Up Brownfields 

Enacted in 1980, the Comprehensive Environmental Response, Compensation, and Liability Act imposed liability for the release of hazardous substances on four categories of potentially responsible parties, or PRP the owner or operator of the facility at which the release occurred

Pay Attention to Specific Lease Terms to Avoid Litigation 

Although they are among the most common legal documents in commercial real estate, leases often are items of contention due to misunderstanding of terms or unspecific wording. As the following cases illustrate, landlords and tenants must pay close attention to

No Uncertain Terms 

What does it mean to vacate the premises in commercial leases? The denotation can be critical, particularly in cases where vacating the premises triggers a default. Last August, the District of Columbia Court of Appeals was called on to

Preserving Property 

Transfer of development rights programs allow property owners to buy and sell development rights without actually exchanging any land. The basic TDR concept is to compensate landowners who give up potential development rights in environmentally sensitive areas or preservation districts

Prevention Plan 

Asbestos litigation poses legitimate challenges and potential economic hardship for commercial real estate property owners. Overall, both prospective and current property owners need to be aware of and guard themselves against asbestos related risks associated with acquiring or owning a