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Are Property Managers Debt Collectors? 

In December 1998, a case that has potential significance for residential property managers and others who routinely collect rent for property owners came before the U.S. Court of Appeals for the 2nd Circuit. Romea v. Heiberger & Associates involved a

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

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

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

Taking Issue with Taking by Regulation 

The story is familiar to property owners and legal practitioners In 1990, John and Florence Dolan attempted to obtain approval from the city of Tigard, Oregon, to replace their existing plumbing and electrical supply store in downtown Tigard with a

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

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

Developers Must Establish Public Purpose to Justify Eminent Domain 

Eminent domain is the well established right of government to condemn or take private property for public purposes. Most arguments relating to eminent domain deal with whether or not the owners of taken properties received just compensation. The general rule

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

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

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

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

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

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

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

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

The Write Stuff 

When partnerships sell commercial property, industry professionals must secure the written authorization of all the partners or co owners on both listing and purchase agreements to ensure that contracts are legally binding. If such an action is not possible, brokers

Who Pays for the Stigma of Environmental Contamination? 

A national effort to identify and clean up environmental contamination has raised several issues relating to cleanup costs. Recently, a debate has emerged over who is responsible for covering costs when a property loses market value because of its proximity

A Wise Compromise 

A tenant is negotiating with a landlord to lease office space. The term of the potential lease is five years, but the tenant also wants the right to extend the lease for an additional five years. This situation is increasingly

Word Rights and Options Provisions Carefully to Avoid Contract Confusion 

Avoiding imprecise language is immensely important when drafting documents for property sales or leases. This especially is true when dealing with options to purchase, rights of first offer, and rights of first refusal. While most real estate professionals understand the

Closing Counsel 

Today&rsquo s demand for new product in most real estate sectors has convinced a number of commercial real estate professionals to try developing properties either out of the ground or through the renovation of existing buildings. While development and redevelopment

Appraisal Update 

Are appraisers more exposed undertaking charitable contribution appraisals when the taxpayer donor seeks a federal tax deduction? This concern arises with the passage of the Pension Protection Act of 2006, signed by President George Bush last August. The PPA increases

Changing the Code 

On April 20, 2005, President Bush signed into law the Bankruptcy Abuse, Prevention, and Consumer Protection Act of 2005. While the act primarily reforms the bankruptcy laws affecting consumer cases, it also contains a number of amendments applicable to business

Transfer Request 

Bundle of sticks is the idiom commonly used to describe the rights that constitute fee simple property ownership. The common law right to receive compensation for injury to real property can be the most important “stick” within that bundle. It