Renegotiating Office Leases in a Work-From-Home World: Contract, Common Law, Context Issues, Standstill Agreements.

Avoiding Insolvency Claims by Tenants Through Abatements, Deferrals, Subleases, Assignments

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


Conducted on Tuesday, December 8, 2020

Recorded event now available

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Program Materials

This CLE webinar will provide practical guidance to leasing attorneys that are facing requests to renegotiate a commercial lease due to the current economic downturn. Counsel for landlords and tenants will be provided solutions that range from contractual-based solutions creating abatements or deferrals, common law solutions that focus on doctrines that offer (or limit) early termination, and contextual solutions that look at the landlord's and tenant's financial situations--both currently and prospectively--and attempts to creatively meet all stakeholders' needs.

Description

The economy continues to struggle, and companies large and small face the immediate concern of obligations under their commercial leases. There are a number of potential solutions for both landlords and tenants.

First and foremost, the parties must determine whether a true contractual resolution is possible. Tenants positioned for a true resurgence may want to look at abatements or deferrals. Tenants subject to a true contraction may consider subleasing or assigning portions of the space or term of the lease to a new tenant.

Outside of contract, there are common law solutions if either party identifies grounds to pursue (or defend) a claim regarding the doctrines of impossibility, impracticality of purpose, or frustration of purpose.

Finally, the stakeholders must consider the context of the overarching situation when attempting negotiations. What is the current occupancy level of the retail development and how will that impact negotiations? What is the financial situation of tenant? Is bankruptcy more or less a certainty such that a deferral is simply moving a few months down the calendar?

Parties might also consider the possibility that standstill agreements may pause rent collection and lease negotiations until a future date when the economy is more stable.

Listen as our expert panel discusses the possibilities to negotiate and resolve lease issues landlords and tenants face in light of the current economic trends and addresses the contractual, common law, and contextual issues that come into play when trying to meet each parties' needs.

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Outline

  1. Overview of current economic status and state of commercial leased real estate
  2. Contract law solutions
    1. Abatement
      1. Partial
      2. Total
    2. Deferrals
    3. Subleases
    4. Assignments
  3. Common law solutions
    1. Doctrine of impossibility
    2. Doctrine of impracticality of purpose
    3. Doctrine of frustration of purpose
  4. Contextual solutions
  5. Standstill agreements

Benefits

The panel will review these and other relevant topics:

  • When should a landlord consider a contractual solution for a defaulting tenant? Which contract solutions work best in each economic situation?
  • How does common law impact a tenant's ability to terminate early, and what grounds can landlords use to dispute such terminations?
  • What is the global context--empty space in a complex, access to temporary funding, signs of an economic upswing, etc.-- for developing a tailored solution?
  • When should standstill agreements be utilized, and what are the risks?

Faculty

Kelly, John G.
John G. Kelly

Shareholder
Bean Kinney & Korman

Mr. Kelly focuses his practice on general corporate law and real property law, including commercial real estate...  |  Read More

Schiffer, Jennifer
Jennifer O. Schiffer

Shareholder
Bean Kinney & Korman

Ms. Schiffer is a shareholder of Bean, Kinney & Korman. She represents various businesses and their owners in...  |  Read More

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