The Dirt Lawyer's Blog Archive

This is a story of knowing your client.  Here's why. I love it when people -- usually ones not too experienced in the industry -- tell me, "Oh, leases are all pretty much the same. You have a landlord, a tenant, a building and a term.  Just plug in the magic words and off you go." In a word, wrong.  In fact, this is wrong on so many levels that I felt I needed to write about it. First of all, who is the tenant and what is the building?  Different buildings and different tenants require completely different types of leases.  Yes, some of the language can be the same but the needs are completely different between, for example, office and industrial and retail uses. Here is just one example.  Most commercial leases contain a clause requiring the tenant to use and occupy the premises throughout the term of the lease.  Now, many of my landlord clients really do not give a hoot whether an office or industrial tenant actually uses the premises, so long as it keeps writing that r

Today's Wall Street Journal profiled two big Larry Freed projects that have had problems discussed here before: Block 37 and the old Carson Pirie Scott building, which some people might actually call Sullivan Center.  They are probably the same folks who call Sears Tower the Willis Tower. Before I go further: it isn't just the same developer we are talking about here.  Both properties are in the same city, Chicago.  And they are on the same street, State Street.  Indeed, the two projects are what -- a whopping one block apart from each other. Bank of America, as successor to LaSalle National Bank is the lender on Block 37; PNC, as successor to National City, is the lender on the Carson's building.  As we know, B of A is trying to foreclose and appoint a receiver on the ill-fated Block 37, which has been through more developers and concepts than I can even remember at this point.  PNC, on the other hand, has negotiated an extension -- for now. Why?  Oh, the story pretty muc

I honestly thought they were going to get rid of covenant fees by legislation from real estate transaction or the like.  But according to this NYT story they are alive and well, at least in some jurisdictions. Yup, the developer, for the next 99 years, gets what amounts to a 1% transfer tax whenever a property is sold.  The thought, I guess, is that these rights could be securitized and sold to give the developer more cash or perhaps coupons to clip down the road.  And now of course people are complaining that these fees were buried deep into a declaration of covenants and taht they are unfair.  Yadda, yadda, yadda. Part of me is angry at the developers for potentially being sneaky.  (I can't say with certainty what disclosure, if any, there was.) But another part of part of me wants to laugh at the buyers.  Where the heck was your real estate lawyer? I live in an area where lawyers are not involved in most real estate transactions.  I am also on the board of my homeowners associ

I was reading Shopping Centers Today (the ICSC's member magazine) last night and enjoyed reading the lead article, a piece on lessons learned by developers that left them wiser. But then I read one of the tales, from Bob Champion, a well-respected Southern California developer whose company rings a bell in my head, though I can't recall having done any deals with it.  Champion recounted a story where he received legal advice on rehabbing a historic building.  Apparently, the advice was to the effect that his project would be exempt from the Americans with Disabilities Act (and though not stated, perhaps also its stricter, as I recall, California counterpart). It turned out that the city decided the property did have to comply and it cost him. Ouch. Now, this is just an anecdote in a magazine article, so I don't know whether anyone reached out to the city (the first thing I would have done), whether the decision was litigated (if it fact it could be) or any of the other fac