Reciprocal Easement Agreements for Retail and Mixed-Use Project Development: Structuring and Amending REAs

Protecting Rights and Obligations; Minimizing Risk for Developers, Retailers and Other Project Constituents

Recording of a 90-minute premium CLE webinar with Q&A


Conducted on Tuesday, June 11, 2019

Recorded event now available

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Program Materials

This CLE webinar will guide real estate practitioners through drafting reciprocal easement agreements (REAs) for retail and mixed-use developments and redevelopments, subdividing existing projects for investment sales, avoiding common pitfalls in preparing REAs, and utilizing best practices for updating existing REAs.

Description

REAs for retail and mixed-used projects create complicated contractual rights and obligations that impact the developer's, owners' and retailer's ability to own, use, manage, sell and finance property. Counsel must avoid pitfalls and conflicts to minimize disputes and operational problems when drafting or amending REAs.

Common elements of the agreements address critical business issues such as access, construction, shared parking, signage, and maintenance obligations. Other crucial terms include the process for amending the REA agreement and protection for the parties' lenders.

As the nature of retail development transforms with the increase in demand for mixed-use projects, the urbanization of many parts of the country, and as developers look for opportunities to reconfigure obsolete space or to rejuvenate older malls, this often requires updating and amending existing REAs or creating new ones.

Listen as our authoritative panel provides practitioners with a clear understanding of how to draft REAs for retail projects, how to avoid common drafting pitfalls, and how to amend existing documents.

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Outline

  1. Standard REA provisions
    1. Easements
      1. Exclusive vs. nonexclusive
      2. Easement scope—alteration of use
      3. Maintenance and repair
      4. Unity of title—abandonment
      5. Utilities
    2. Maintenance and repair of common areas
      1. Who operates?
      2. Ownership of common areas
      3. Maintenance and repair responsibilities
    3. Alterations and building restrictions
      1. Architectural control
      2. Zoning lots
      3. Esoteric construction and design elements
    4. Covenants and use restrictions
      1. Exclusive uses
      2. Prohibited uses
      3. Going dark; change of use
      4. Lease exclusives and prohibitions
  2. Operational and practical issues
    1. Parking
    2. Costs for maintenance and operation
    3. Developer rights
    4. Site plans
      1. Congruence with REA
      2. “Graphic relief”
      3. Implied use restrictions
      4. Ability to amend
      5. Adherence to site plan
    5. Litigation issues
      1. Enforcement rights and remedies
      2. Mechanics liens
      3. “Forcibly” amending or dissolving REA
      4. Judicial intervention
      5. Tort and premises liability
    6. Big box/anchor tenant issues
      1. Control of operator
      2. Use restrictions
      3. No change provisions
      4. Outside sales areas
    7. Signage
      1. Set pecking order
      2. Signage restrictions as CC&Rs
      3. Separate parcel
    8. Bankruptcy
      1. Automatic default
      2. Right to reject as executory contract
      3. Section 363 sale
      4. Right under Section 365(b)(3)
  3. REA redevelopment issues
    1. Amendments
      1. “Frozen” site plans or covenants
      2. Parking rights
      3. Permitted building areas
    2. Easements and “cross shopping”
    3. Use restrictions

Benefits

The panel will review these and other crucial issues:

  • The fundamental components of REAs for retail development and mixed-used developments
  • Costly drafting errors that counsel most commonly make when drafting REAs
  • How to draft, analyze, interpret and amend existing REAs

Faculty

Kochanski, David
David M. Kochanski

Shareholder
Shulman Rogers

Mr. Kochanski acts as lead counsel for national and regional real estate developers, builders, and related clients...  |  Read More

Woodard, Larry
Larry N. Woodard

Principal
Miller Canfield Paddock and Stone

Mr. Woodard provides clients counsel in a wide array of transactional and business settings, as well as tactical...  |  Read More

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