David Wiener asked me to post the following question to the leasing committees. *Subject: Continuing Effectiveness of on Shopping Center of Use Restriction under Lease of Outparcel that has been sold* *Dear Committee Members,* *I would be very grateful for any insights on the following fact pattern and question:* 1. *Landlord owns a shopping center that contains an in-line retail building and an outparcel on which a free-standing building has been constructed* 2. *Landlord leases the outparcel and the free-standing building thereon to a tenant. * 3. *The outparcel lease contains a provision imposing various use restrictions on the balance of the shopping center* 4. *Neither the outparcel lease, nor any memorandum thereof, is recorded in the Public Records* 5. *Subsequently, Landlord plats the shopping center, thereby subdividing it into two separate legal lots, namely the outparcel, as one lot, and the balance of the shopping center (the “Core Parcel”), as the other lot. * 6. *In conjunction with the platting process, Landlord records a Declaration of Reciprocal Easements and Restrictive Covenants (the “REA”) that encumbers both the outparcel and the Core Parcel* 7. *Landlord sells and conveys the outparcel to a third party and as part of the transaction, Landlord assigns all of its rights under the outparcel lease to the purchaser, who assumes the lease effective as of the closing date* 8. *Nothing in the conveyancing documents – and nothing in the REA - imposes any use restrictions on the Core Parcel (although the REA does impose use restrictions on the outparcel) – and nothing in the conveyancing documents and nothing in the REA purports to continue the effectiveness of the use restrictions in the outparcel lease as an on-going encumbrance on the Core Parcel* *Here is my question: * *Since, presumably, the owner of the Core Parcel ceases to be the “landlord” under the outparcel lease upon the closing of the sale of the outparcel to the third party, is the owner of the Core Parcel still bound by the use restrictions that are contained in the outparcel lease?* *Please let me have your thoughts* *Thanks very much.* *___________________________* David J. Wiener, Esq. David J. Wiener, P.A. 3200 N. Military Trail Suite 400 Boca Raton, FL 33431 Telephone: 561-989-2910 Facsimile: 561-361-8898 Email: dwiener@woolbright.net Kristen King Jaiven, Esq. General Counsel The Signature Real Estate Companies 901-C Clint Moore Road Boca Raton, FL 33487 Ph: 561.705.0140 Direct Line: 561-300-6921 Email: Kristen@quadcompanies.com www.SignatureRealEstateCompanies.com <http://www.signaturerealestatecompanies.com/> [image: Signature Partners] <http://mysignaturenetwork.com/> -- This email and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed. If you have received this email in error please notify the system manager. Please note that any views or opinions presented in this email are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email. Quad Realty Investments, Inc. d/b/a The Signature Real Estate Companies 901-C Clint Moore Road Boca Raton, FL 33487 Email Abuse Reporting: it@quadcompanies.com <mailto:it@quadcompanies.com>