Real Estate Journal — Shopping Centers — April 29 - May 12, 2016 — 9A
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By Jerry A. Nelson and Thomas S. Onder, Stark & Stark Ensuring compliance with your leases
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Chapter 11 retail bankruptcy filings. As a landlord, you need to know how the lease will be treated in the bankruptcy case. Hiring effective counsel is key. But it is also important to ensure your lease provides for collection of those fees in the bankruptcy. Make certain that counsel reviews the lease provision and correct it if need be with an amendment before the filing. Jerry A. Nelson and Thomas S. Onder are share- holders and members of the Commercial, Retail and Industrial Real Estate Group at Stark & Stark. n
hopping centers are re- quired to comply with many municipal, state
percentage rent is a “no-no,” as it is viewed as a kick-back. 4. Environmental Issues
sion is key to managing the risks associated with these tenants. Don’t forget to have
tion of the lease term. 5. Residential Leasing Adding a multi-family com- ponent to a shopping center can really drive traffic and make a good center great. However, multi-family, mixed use and other residential com- ponents need to comply with residential lease laws that can be much different than retail leasing laws. Safeguard that the residential lease addresses any security deposit, removal, abandoned property, as well as collection of attorneys’ fees/ costs. 6. Bankruptcy There has been a rash of
and federal laws, codes, ordinances, r u l e s a n d regulations. Fa i l u r e t o comply can incur fines, p e n a l t i e s , damages and
“Adding a multi-family component to a shopping center can really drive traffic and make a good center great. However, multi-family, mixed use and other residential components need to comply with residential lease laws that can be much different than retail leasing laws. ”
Jerry Nelson
Centers to- day deal with hazardous sub- stances frommedical uses, dry cleaners and gas stations. It is critical that the lease provide a system for proper disposal. Further, the insurance provi- Thomas Onder
the lease provide for the use of qualified and licensed en- vironmental professionals for inspections and disposal when needed, as well as proper sur- render of the premises at the expiration or earlier termina-
lost opportunities. It is vital that you retain experienced counsel that understands these complex compliance issues to save both cost and time. The following are just a few com- pliance issues to note on your next lease: 1. Land Use/Licensing The lease use and improve- ment provision is crucial to compliance. If a variance, license or other approval is required, savvy lease drafting should provide who will be responsible to obtain it and when, as well as what happens if approvals are not timely obtained. 2. ADA Americans with Disabilities Act (“ADA”) provides persons with disabilities an equal op- portunity to access and enjoy places of public accommoda- tion. However, the industry has seen a rise in serial ADA litigants “trolling” for techni- cal violations to simply shake down a landlord. Having rou- tine audits to correct violations can prevent both violations and these suits from occurring. In addition, the lease should allocate responsibility for per- forming work in compliance with ADA requirements inside tenant spaces, as well as the parking lot and other common areas. 3. Medical Use and Health Care The rise in urgent care cen- ters, clinics, labs and other medical uses is a boon to land- lords. Navigating the variety of laws, including the Stark Law, Anti-Kickback Statute, Affordable Care Act, False Claims Act, Exclusion Statute, Civil Monetary Penalty Law and the Health Insurance Por- tability and Accountability Act (“HIPAA”) can be daunting. However, certain exceptions and safe harbors can help avoid costly violations. It is impor- tant that counsel understand these laws and not simply use the same lease for other non- medical use space. For example, many people do not know that
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