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Building a Case for Constructive Eviction 

During a typical Washington, D.C., summer, the state of the art air conditioning system in a recently completed class A office building broke down. With the windows closed, temperatures indoors routinely exceeded 90 degrees Fahrenheit. With the windows open, the

Broker Beware of Changes in Buyer Beware 

Anyone involved in the commercial real estate business even 20 years ago knows that a basic tenet of doing business historically has been caveat emptor—let the buyer beware. Simply stated, this doctrine puts the burden of evaluating the quality and

Bankruptcy Sales 

As this real estate cycle heads into its downturn, developers, investors, and lenders may face bankruptcy issues that they have not experienced in the past. Market slowdowns during the last 18 months may require these parties, as well as others,

Avoidance Behavior 

Mediation, arbitration, and other forms of alternative dispute resolution have become a favorable choice in today’s commercial real estate market. While ADR can be helpful, the involved parties often don’t realize the expectations of the process, which can make it

Business Breakups 

Given commercial real estate’s protracted downturn, brokerage arrangements, investment groups, and client partnerships may be on shaky footing these days. While breaking up is hard to do, learning how to do it successfully can help all business participants to pick

Cases Reinforce Importance of Brokerage Agreements to Obtain Commissions 

Many real estate brokers assume that a signed letter of intent or contract between a buyer and seller automatically guarantees them a commission. This could be a costly assumption, because letters of intent and contracts can be interpreted in different

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

Carveout Consequences 

In the commercial real estate market&rsquo s current distressed state, mortgage lenders are faced with falling real estate values and sluggish properties that can&rsquo t meet debt service obligations. Inevitably, loan documents become the roadmap for lenders seeking to recoup

Click With Caution 

The statute of frauds, which dates back to 17th century England and continues in some form in every state, requires that contracts for the transfer of real estate interests and for the sale of goods above a certain dollar amount

Court's ADA Ruling Reminds Property Owners and Managers About Access Requirements 

Congress enacted the Americans with Disabilities Act as a comprehensive law designed to remedy discrimination — whether it is intentional or not — against those with disabilities in public and commercial facilities. The ADA requires continued efforts over time to

Contamination Examination 

Real estate recessions create terrific investment opportunities &mdash the trick is figuring out which ones are right for you. With banks and loan servicers increasingly swamped by foreclosure properties, environmentally contaminated properties can offer particularly good deals. A fair amount

Default Decisions 

In the current market environment, commercial property landlords are experiencing an increase in the number of tenants that are party to U.S. Bankruptcy Code Chapter 7 and Chapter 11 proceedings. Landlords should have a basic understanding of their rights when

Deal Diagnosis 

During the past decade, hospitals and healthcare providers have been on a building spree. Not only is the quantity of developments growing, but project size is on the rise. Hospitals and healthcare providers often build new because aging facilities cannot

Deposit Disputes 

Part of the toll of the ongoing commercial real estate slump is the high frequency of terminated deals. Scarcity of financing, valuation disconnects, and general economic concern all contribute to the “kill rate.” Of course, any time a deal is

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

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

Buyer Beware 

Despite the current economy, the long term outlook for commercial real estate investments remains strong. In this market, foreclosing lenders, equity investors, and other bargain hunters have numerous attractive opportunities to acquire defaulting and distressed commercial real estate assets.  

Conversion Conundrum 

As the housing market continues to suffer through its worst decline in recent history and demand for unsold units within recently developed condominium projects evaporates, the repositioning of condo projects into apartments may be a successful strategy for owners or

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

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

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

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

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

Lease Language 

Although the basic ingredients for commercial leases are the same, they can vary widely in length and number of issues covered. While many aspects of landlord tenant agreements are tried and true, what happens when an aggressive and creative landlord

Commercial Calculations 

Rent, operating expenses, tax obligations, and several other economic matters are tied to the square footage of leased premises. Generally speaking, a higher square footage yields higher rent and other payments for the leased premises. Therefore, landlords and tenants often