Non-disturbance clauses key for tenants today.No business escaped the recession unscathed. Commercial real estate brokers and owners alike have felt the affects of falling rental rates and corporate downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing . Even the strongest of New York's landlords felt the effects of corporate downsizing and declining rents. Many made headlines for losing properties through bankruptcy or foreclosure foreclosure Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. but little has been said of the tenants left behind to deal with new owners and new rules. The fact is that ownership instability has begun to severely impact all types of tenants in all types of buildings. We are seeing many situations where buildings remain in "ownership limbo limbo In Roman Catholicism, a region between heaven and hell, the dwelling place of souls not condemned to punishment but deprived of the joy of existence with God in heaven. The concept probably developed in the Middle Ages. " for years, with tenants unable to get answers to their questions or fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. of their lease covenants. In some cases, tenants remain tied to their leases while building services continue to diminish around them. These days, more than ever before, it is imperative that tenants protect their businesses from a potential shift in building ownership. The most common means of such a safeguard: The negotiation of a carefully worded non-disturbance agreement. These agreements, obtainable only from a landlord, should do more than protect the tenant in the event of a foreclosure. They should also obligate obligate /ob·li·gate/ (ob´li-gat) pertaining to or characterized by the ability to survive only in a particular environment or to assume only a particular role, as an obligate anaerobe. the lender to perform all the covenants of the lease which were promised to the tenant, including tenant work and other improvements. The right to offset must be spelled out very carefully in such professions. Selfhelp provisions and penalties should be added in the event obligations are not fulfilled. It is important to note that during the period when the building fails to meet its commitments, the right to offset is of no use. Clearly, self-help provisions are of paramount importance. As brokers with more than 60 years of experience in commercial real estate, Newmark has witnessed many economic cycles. Over time we've learned to structure transactions that actually help tenants grow. Today, with "small" (under 100 employees) businesses making up about half of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of City's tenant roster, Newmark is using its experience and expertise to protect these businesses 'and find ways to help them flourish. The careful structuring of a nondisturbance clause is just one piece of the, overall puzzle. New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. businesses have enough challenges on their hands today without having to worry about their landlord's financial stability. |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion