Empathy List Archives

GP

George Pincus

Tue, Feb 23, 2010 7:37 PM

Is it just me or is every tenant on the planet trying to negotiate acceleration clauses out of leases?

How are you responding to this in this tenant oriented market?

What are you saying to your landlord clients when they look at you and say "I need to plug the whole in my building, I don't care what the tenant is asking for - get this deal done ", knowing that someday they will come back and say to you "how could you let me sign a lease without an acceleration clause in the remedies section?"

I am dealing with this every day, so I am interested in how other people are responding to this issue.

Thanks.

George A. Pincus, Esq.
Shareholder
Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A.
New River Center, Suite 2100
200 East Las Olas Boulevard
Ft. Lauderdale, FL 33301
Telephone: 954-766-9705
Facsimile: 954-766-9719
E-mail: gpincus@stearnsweaver.com mailto:gpincus@swmwas.com
www.stearnsweaver.com

CONFIDENTIALITY NOTICE: The information contained in this E-mail message is attorney privileged and confidential information intended only for the use of the individual(s) named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copy of this communication is strictly prohibited. If you have received this communication in error, please contact the sender by reply E-mail and destroy all copies of the original message. Thank you.

CIRCULAR 230 DISCLOSURE: To ensure compliance with recently-enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including any attachments, is not intended or written by us to be used, and cannot be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government or for promoting, marketing or recommending to another party any tax-related matters addressed herein.

Is it just me or is every tenant on the planet trying to negotiate acceleration clauses out of leases? How are you responding to this in this tenant oriented market? What are you saying to your landlord clients when they look at you and say "I need to plug the whole in my building, I don't care what the tenant is asking for - get this deal done ", knowing that someday they will come back and say to you "how could you let me sign a lease without an acceleration clause in the remedies section?" I am dealing with this every day, so I am interested in how other people are responding to this issue. Thanks. George A. Pincus, Esq. Shareholder Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. New River Center, Suite 2100 200 East Las Olas Boulevard Ft. Lauderdale, FL 33301 Telephone: 954-766-9705 Facsimile: 954-766-9719 E-mail: gpincus@stearnsweaver.com<mailto:gpincus@swmwas.com> www.stearnsweaver.com ________________________________ CONFIDENTIALITY NOTICE: The information contained in this E-mail message is attorney privileged and confidential information intended only for the use of the individual(s) named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copy of this communication is strictly prohibited. If you have received this communication in error, please contact the sender by reply E-mail and destroy all copies of the original message. Thank you. ________________________________ CIRCULAR 230 DISCLOSURE: To ensure compliance with recently-enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including any attachments, is not intended or written by us to be used, and cannot be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government or for promoting, marketing or recommending to another party any tax-related matters addressed herein.

FS

Frank, Scott A.

Tue, Feb 23, 2010 7:46 PM

Doing a large number of retail leases, this is something I have had to
deal with for national credit tenants for quite a while. And the truth
of the matter is, with the big players, we almost always give in.

But you are right in that a larger number of smaller, less credit-worthy
tenants are asking for it more these days. I have given in some times,
and not others. A few compromises I have used (representing both
landlords and tenants) is the reduction to present value/offsetting
against market value; inserting a liquidated damages clause in its stead
(anywhere from 3-12 months rent depending on what the market could
justify); and bumping up security deposits to offset the losses. I also
am careful to advise landlords of their need to stay on top of
defaulting tenants and of how they will need to proceed in the future in
the event of a default - i.e., pay my litigation partners lots of money
to go after ongoing defaults. But again you are right in that landlords
today just want filled space, and are often willing to risk that the
space may be empty again in 9 months without fully adequate remedies
against the tenant - but I tell them and let them decide.

Scott A Frank
Attorney at Law
ARNSTEIN & LEHR LLP
www.arnstein.com http://www.arnstein.com/

515 North Flagler Drive
Sixth Floor
West Palm Beach, Florida 33401-4323
Phone: 561.833.9800
Fax: 561.655.5551

433 Plaza Real
Suite 275
Boca Raton, Florida 33401-4323
Phone: 561.962.4145
Fax: 561.962.4245
SAFrank@arnstein.com mailto:SAFrank@arnstein.com

Offices in Illinois, Florida, and Wisconsin

From: landten-bounces@lists.flabarrpptl.org
[mailto:landten-bounces@lists.flabarrpptl.org] On Behalf Of George
Pincus
Sent: Tuesday, February 23, 2010 2:38 PM
To: RPPTL Landlord Tenant Committee
Subject: [RPPTL LandTen] Accelaration Clauses - What's up with that?

Is it just me or is every tenant on the planet trying to negotiate
acceleration clauses out of leases?

How are you responding to this in this tenant oriented market?

What are you saying to your landlord clients when they look at you and
say "I need to plug the whole in my building, I don't care what the
tenant is asking for - get this deal done ", knowing that someday they
will come back and say to you "how could you let me sign a lease without
an acceleration clause in the remedies section?"

I am dealing with this every day, so I am interested in how other people
are responding to this issue.

Thanks.

George A. Pincus, Esq.

Shareholder

Stearns Weaver Miller Weissler

Alhadeff & Sitterson, P.A.

New River Center, Suite 2100

200 East Las Olas Boulevard

Ft. Lauderdale, FL 33301

Telephone: 954-766-9705

Facsimile: 954-766-9719

E-mail: gpincus@stearnsweaver.com mailto:gpincus@swmwas.com

www.stearnsweaver.com

CONFIDENTIALITY NOTICE: The information contained in this E-mail message
is attorney privileged and confidential information intended only for
the use of the individual(s) named above. If the reader of this message
is not the intended recipient, you are hereby notified that any
dissemination, distribution or copy of this communication is strictly
prohibited. If you have received this communication in error, please
contact the sender by reply E-mail and destroy all copies of the
original message. Thank you.

CIRCULAR 230 DISCLOSURE: To ensure compliance with recently-enacted U.S.
Treasury Department Regulations, we are now required to advise you that,
unless otherwise expressly indicated, any federal tax advice contained
in this communication, including any attachments, is not intended or
written by us to be used, and cannot be used, by anyone for the purpose
of avoiding federal tax penalties that may be imposed by the federal
government or for promoting, marketing or recommending to another party
any tax-related matters addressed herein.

This electronic mail transmission may contain confidential or privileged information.
If you believe that you have received this message in error, please notify
the sender by reply transmission and delete the message without copying or disclosing it.

Pursuant to Internal Revenue Service guidance, be advised that any federal tax
advice contained in this written or electronic communication, including any
attachments or enclosures, is not intended or written to be used and it cannot
be used by any person or entity for the purpose of (i) avoiding any tax penalties
that may be imposed by the Internal Revenue Service or any other U.S. Federal
taxing authority or agency or (ii) promoting, marketing or recommending
to another party any transaction or matter addressed herein.

Doing a large number of retail leases, this is something I have had to deal with for national credit tenants for quite a while. And the truth of the matter is, with the big players, we almost always give in. But you are right in that a larger number of smaller, less credit-worthy tenants are asking for it more these days. I have given in some times, and not others. A few compromises I have used (representing both landlords and tenants) is the reduction to present value/offsetting against market value; inserting a liquidated damages clause in its stead (anywhere from 3-12 months rent depending on what the market could justify); and bumping up security deposits to offset the losses. I also am careful to advise landlords of their need to stay on top of defaulting tenants and of how they will need to proceed in the future in the event of a default - i.e., pay my litigation partners lots of money to go after ongoing defaults. But again you are right in that landlords today just want filled space, and are often willing to risk that the space may be empty again in 9 months without fully adequate remedies against the tenant - but I tell them and let them decide. Scott A Frank Attorney at Law ARNSTEIN & LEHR LLP www.arnstein.com <http://www.arnstein.com/> 515 North Flagler Drive Sixth Floor West Palm Beach, Florida 33401-4323 Phone: 561.833.9800 Fax: 561.655.5551 433 Plaza Real Suite 275 Boca Raton, Florida 33401-4323 Phone: 561.962.4145 Fax: 561.962.4245 SAFrank@arnstein.com <mailto:SAFrank@arnstein.com> Offices in Illinois, Florida, and Wisconsin ________________________________ From: landten-bounces@lists.flabarrpptl.org [mailto:landten-bounces@lists.flabarrpptl.org] On Behalf Of George Pincus Sent: Tuesday, February 23, 2010 2:38 PM To: RPPTL Landlord Tenant Committee Subject: [RPPTL LandTen] Accelaration Clauses - What's up with that? Is it just me or is every tenant on the planet trying to negotiate acceleration clauses out of leases? How are you responding to this in this tenant oriented market? What are you saying to your landlord clients when they look at you and say "I need to plug the whole in my building, I don't care what the tenant is asking for - get this deal done ", knowing that someday they will come back and say to you "how could you let me sign a lease without an acceleration clause in the remedies section?" I am dealing with this every day, so I am interested in how other people are responding to this issue. Thanks. George A. Pincus, Esq. Shareholder Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. New River Center, Suite 2100 200 East Las Olas Boulevard Ft. Lauderdale, FL 33301 Telephone: 954-766-9705 Facsimile: 954-766-9719 E-mail: gpincus@stearnsweaver.com <mailto:gpincus@swmwas.com> www.stearnsweaver.com ________________________________ CONFIDENTIALITY NOTICE: The information contained in this E-mail message is attorney privileged and confidential information intended only for the use of the individual(s) named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copy of this communication is strictly prohibited. If you have received this communication in error, please contact the sender by reply E-mail and destroy all copies of the original message. Thank you. ________________________________ CIRCULAR 230 DISCLOSURE: To ensure compliance with recently-enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including any attachments, is not intended or written by us to be used, and cannot be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government or for promoting, marketing or recommending to another party any tax-related matters addressed herein. This electronic mail transmission may contain confidential or privileged information. If you believe that you have received this message in error, please notify the sender by reply transmission and delete the message without copying or disclosing it. Pursuant to Internal Revenue Service guidance, be advised that any federal tax advice contained in this written or electronic communication, including any attachments or enclosures, is not intended or written to be used and it cannot be used by any person or entity for the purpose of (i) avoiding any tax penalties that may be imposed by the Internal Revenue Service or any other U.S. Federal taxing authority or agency or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

NB

Neil B. Shoter

Wed, Feb 24, 2010 4:14 AM

I second Scott's thoughts. Having dealt with a number of national credit
tenant leases recently and lost the battle for acceleration of rents,
much is dependent on the landlord's bargaining power. However, even
when times were good, many big box and credit retail tenants would
refuse as "policy" the remedy of accelerated rents. The alternative of
discounting to present value usually doesn't satisfy this type of
tenant, who, if they will accept it at all, will prefer to reduce
accelerated rent by the fair market value rent for the remaining term.
I don't consider this alternative much of a bonus to the landlord as it
essentially liquidates the tenant's risk.

http://www.shutts.com/shutts100.jpg Neil B. Shoter
Partner / LEED Accredited Professional

Shutts & Bowen LLP
1100 CityPlace Tower, 525 Okeechobee Boulevard | West Palm Beach, FL
33401
Direct: (561) 650-8535 | Fax: (561) 822-5525
E-Mail mailto:NShoter@shutts.com | Biography
<http://www.shutts.com/index.cfm/fa/attorney.bio/atty/466a1d2b-4049-425b
-af4b-a56f3cb8a441/Neil_B_Shoter.cfm/> | V-Card
<http://www.shutts.com/index.cfm/fa/attorney.vcf/atty/466a1d2b-4049-425b
-af4b-a56f3cb8a441/Neil_B_Shoter.cfm/> | Website
http://www.shutts.com/

From: landten-bounces@lists.flabarrpptl.org

[mailto:landten-bounces@lists.flabarrpptl.org] On Behalf Of Frank, Scott
A.
Sent: Tuesday, February 23, 2010 2:47 PM
To: RPPTL Landlord Tenant Committee
Subject: Re: [RPPTL LandTen] Accelaration Clauses - What's up
with that?

Doing a large number of retail leases, this is something I have

had to deal with for national credit tenants for quite a while. And the
truth of the matter is, with the big players, we almost always give in.

But you are right in that a larger number of smaller, less

credit-worthy tenants are asking for it more these days. I have given
in some times, and not others. A few compromises I have used
(representing both landlords and tenants) is the reduction to present
value/offsetting against market value; inserting a liquidated damages
clause in its stead (anywhere from 3-12 months rent depending on what
the market could justify); and bumping up security deposits to offset
the losses. I also am careful to advise landlords of their need to stay
on top of defaulting tenants and of how they will need to proceed in the
future in the event of a default - i.e., pay my litigation partners lots
of money to go after ongoing defaults. But again you are right in that
landlords today just want filled space, and are often willing to risk
that the space may be empty again in 9 months without fully adequate
remedies against the tenant - but I tell them and let them decide.

Scott A Frank
Attorney at Law
ARNSTEIN & LEHR LLP 
www.arnstein.com <http://www.arnstein.com/> 
 
515 North Flagler Drive 

Sixth Floor 
West Palm Beach, Florida 33401-4323
Phone: 561.833.9800 
Fax: 561.655.5551

433 Plaza Real
Suite 275
Boca Raton, Florida 33401-4323 
Phone: 561.962.4145
Fax: 561.962.4245 
SAFrank@arnstein.com <mailto:SAFrank@arnstein.com> 

Offices in Illinois, Florida, and Wisconsin

From: landten-bounces@lists.flabarrpptl.org

[mailto:landten-bounces@lists.flabarrpptl.org] On Behalf Of George
Pincus
Sent: Tuesday, February 23, 2010 2:38 PM
To: RPPTL Landlord Tenant Committee
Subject: [RPPTL LandTen] Accelaration Clauses - What's up with
that?

Is it just me or is every tenant on the planet trying to

negotiate acceleration clauses out of leases?

How are you responding to this in this tenant oriented market?  

 

What are you saying to your landlord clients when they look at

you and say "I need to plug the whole in my building, I don't care what
the tenant is asking for - get this deal done ", knowing that someday
they will come back and say to you "how could you let me sign a lease
without an acceleration clause in the remedies section?"

I am dealing with this every day, so I am interested in how

other people are responding to this issue.

Thanks.

 

George A. Pincus, Esq.

Shareholder

Stearns Weaver Miller Weissler

  Alhadeff & Sitterson, P.A.

New River Center, Suite 2100

200 East Las Olas Boulevard

Ft. Lauderdale, FL 33301

Telephone: 954-766-9705

Facsimile:    954-766-9719

E-mail: gpincus@stearnsweaver.com <mailto:gpincus@swmwas.com> 

www.stearnsweaver.com

CONFIDENTIALITY NOTICE: The information contained in this E-mail

message is attorney privileged and confidential information intended
only for the use of the individual(s) named above. If the reader of this
message is not the intended recipient, you are hereby notified that any
dissemination, distribution or copy of this communication is strictly
prohibited. If you have received this communication in error, please
contact the sender by reply E-mail and destroy all copies of the
original message. Thank you.

CIRCULAR 230 DISCLOSURE: To ensure compliance with

recently-enacted U.S. Treasury Department Regulations, we are now
required to advise you that, unless otherwise expressly indicated, any
federal tax advice contained in this communication, including any
attachments, is not intended or written by us to be used, and cannot be
used, by anyone for the purpose of avoiding federal tax penalties that
may be imposed by the federal government or for promoting, marketing or
recommending to another party any tax-related matters addressed herein.

This electronic mail transmission may contain confidential or

privileged information.
If you believe that you have received this message in error,
please notify
the sender by reply transmission and delete the message without
copying or disclosing it.

Pursuant to Internal Revenue Service guidance, be advised that

any federal tax
advice contained in this written or electronic communication,
including any
attachments or enclosures, is not intended or written to be used
and it cannot
be used by any person or entity for the purpose of (i) avoiding
any tax penalties
that may be imposed by the Internal Revenue Service or any other
U.S. Federal
taxing authority or agency or (ii) promoting, marketing or
recommending
to another party any transaction or matter addressed herein.

IRS CIRCULAR 230 NOTICE: Pursuant to recently enacted
U.S. Treasury Department Regulations, we are now required
to advise you that, unless otherwise expressly indicated,
any federal tax advice expressed above was neither
written nor intended by the sender or this firm to be
used and cannot be used by any taxpayer for the purpose
of avoiding penalties that may be imposed under U.S. tax
law. If any person uses or refers to any such tax advice
in promoting, marketing or recommending a partnership or
other entity, investment plan or arrangement to any
taxpayer, then the advice should be considered to have
been written to support the promotion or marketing by a
person other than the sender or this firm of that
transaction or matter, and such taxpayer should seek
advice based on the taxpayer's particular circumstances
from an independent tax advisor.

The information in this email transmission is privileged
and confidential. If you are not the intended recipient,
nor the employee or agent responsible for delivering it to
the intended recipient, you are hereby notified that any
dissemination or copying of this transmission (including
any attachments) is strictly prohibited. If you have
received this email in error, please notify the sender by
email reply. Thank you.

I second Scott's thoughts. Having dealt with a number of national credit tenant leases recently and lost the battle for acceleration of rents, much is dependent on the landlord's bargaining power. However, even when times were good, many big box and credit retail tenants would refuse as "policy" the remedy of accelerated rents. The alternative of discounting to present value usually doesn't satisfy this type of tenant, who, if they will accept it at all, will prefer to reduce accelerated rent by the fair market value rent for the remaining term. I don't consider this alternative much of a bonus to the landlord as it essentially liquidates the tenant's risk. <http://www.shutts.com/shutts100.jpg> Neil B. Shoter Partner / LEED Accredited Professional ________________________________ Shutts & Bowen LLP 1100 CityPlace Tower, 525 Okeechobee Boulevard | West Palm Beach, FL 33401 Direct: (561) 650-8535 | Fax: (561) 822-5525 E-Mail <mailto:NShoter@shutts.com> | Biography <http://www.shutts.com/index.cfm/fa/attorney.bio/atty/466a1d2b-4049-425b -af4b-a56f3cb8a441/Neil_B_Shoter.cfm/> | V-Card <http://www.shutts.com/index.cfm/fa/attorney.vcf/atty/466a1d2b-4049-425b -af4b-a56f3cb8a441/Neil_B_Shoter.cfm/> | Website <http://www.shutts.com/> ________________________________ From: landten-bounces@lists.flabarrpptl.org [mailto:landten-bounces@lists.flabarrpptl.org] On Behalf Of Frank, Scott A. Sent: Tuesday, February 23, 2010 2:47 PM To: RPPTL Landlord Tenant Committee Subject: Re: [RPPTL LandTen] Accelaration Clauses - What's up with that? Doing a large number of retail leases, this is something I have had to deal with for national credit tenants for quite a while. And the truth of the matter is, with the big players, we almost always give in. But you are right in that a larger number of smaller, less credit-worthy tenants are asking for it more these days. I have given in some times, and not others. A few compromises I have used (representing both landlords and tenants) is the reduction to present value/offsetting against market value; inserting a liquidated damages clause in its stead (anywhere from 3-12 months rent depending on what the market could justify); and bumping up security deposits to offset the losses. I also am careful to advise landlords of their need to stay on top of defaulting tenants and of how they will need to proceed in the future in the event of a default - i.e., pay my litigation partners lots of money to go after ongoing defaults. But again you are right in that landlords today just want filled space, and are often willing to risk that the space may be empty again in 9 months without fully adequate remedies against the tenant - but I tell them and let them decide. Scott A Frank Attorney at Law ARNSTEIN & LEHR LLP www.arnstein.com <http://www.arnstein.com/> 515 North Flagler Drive Sixth Floor West Palm Beach, Florida 33401-4323 Phone: 561.833.9800 Fax: 561.655.5551 433 Plaza Real Suite 275 Boca Raton, Florida 33401-4323 Phone: 561.962.4145 Fax: 561.962.4245 SAFrank@arnstein.com <mailto:SAFrank@arnstein.com> Offices in Illinois, Florida, and Wisconsin ________________________________ From: landten-bounces@lists.flabarrpptl.org [mailto:landten-bounces@lists.flabarrpptl.org] On Behalf Of George Pincus Sent: Tuesday, February 23, 2010 2:38 PM To: RPPTL Landlord Tenant Committee Subject: [RPPTL LandTen] Accelaration Clauses - What's up with that? Is it just me or is every tenant on the planet trying to negotiate acceleration clauses out of leases? How are you responding to this in this tenant oriented market? What are you saying to your landlord clients when they look at you and say "I need to plug the whole in my building, I don't care what the tenant is asking for - get this deal done ", knowing that someday they will come back and say to you "how could you let me sign a lease without an acceleration clause in the remedies section?" I am dealing with this every day, so I am interested in how other people are responding to this issue. Thanks. George A. Pincus, Esq. Shareholder Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. New River Center, Suite 2100 200 East Las Olas Boulevard Ft. Lauderdale, FL 33301 Telephone: 954-766-9705 Facsimile: 954-766-9719 E-mail: gpincus@stearnsweaver.com <mailto:gpincus@swmwas.com> www.stearnsweaver.com ________________________________ CONFIDENTIALITY NOTICE: The information contained in this E-mail message is attorney privileged and confidential information intended only for the use of the individual(s) named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copy of this communication is strictly prohibited. If you have received this communication in error, please contact the sender by reply E-mail and destroy all copies of the original message. Thank you. ________________________________ CIRCULAR 230 DISCLOSURE: To ensure compliance with recently-enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including any attachments, is not intended or written by us to be used, and cannot be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government or for promoting, marketing or recommending to another party any tax-related matters addressed herein. This electronic mail transmission may contain confidential or privileged information. If you believe that you have received this message in error, please notify the sender by reply transmission and delete the message without copying or disclosing it. Pursuant to Internal Revenue Service guidance, be advised that any federal tax advice contained in this written or electronic communication, including any attachments or enclosures, is not intended or written to be used and it cannot be used by any person or entity for the purpose of (i) avoiding any tax penalties that may be imposed by the Internal Revenue Service or any other U.S. Federal taxing authority or agency or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. IRS CIRCULAR 230 NOTICE: Pursuant to recently enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice expressed above was neither written nor intended by the sender or this firm to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that may be imposed under U.S. tax law. If any person uses or refers to any such tax advice in promoting, marketing or recommending a partnership or other entity, investment plan or arrangement to any taxpayer, then the advice should be considered to have been written to support the promotion or marketing by a person other than the sender or this firm of that transaction or matter, and such taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor. The information in this email transmission is privileged and confidential. If you are not the intended recipient, nor the employee or agent responsible for delivering it to the intended recipient, you are hereby notified that any dissemination or copying of this transmission (including any attachments) is strictly prohibited. If you have received this email in error, please notify the sender by email reply. Thank you.

GP

George Pincus

Wed, Feb 24, 2010 2:37 PM

Thanks to Scott Frank, David Drobner, Charles Levin and Neil Shoter for their thoughtful replies (and to Art Menor for commiserating with me on the phone).

An annual acceleration remedy, with a duty to mitigate (less costs of mitigation and some language about not having to take way below market deals as part of the duty to mitigate) is where I am coming out on this issue, with a stern warning to clients that they cannot come back and blame me for a remedies clause to which they agreed which is different from what they were used to in the good old days when landlord's had leverage.

Perhaps yesterday's e-mail was more of a vent/cry for help in a moment of severe frustration, but I appreciate the members of the group taking the time to respond.

George A. Pincus, Esq.
Shareholder
Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A.
New River Center, Suite 2100
200 East Las Olas Boulevard
Ft. Lauderdale, FL 33301
Telephone: 954-766-9705
Facsimile: 954-766-9719
E-mail: gpincus@stearnsweaver.com mailto:gpincus@swmwas.com
www.stearnsweaver.com http://www.stearnsweaver.com

From: landten-bounces@lists.flabarrpptl.org [mailto:landten-bounces@lists.flabarrpptl.org] On Behalf Of Frank, Scott A.
Sent: Tuesday, February 23, 2010 2:47 PM
To: RPPTL Landlord Tenant Committee
Subject: Re: [RPPTL LandTen] Accelaration Clauses - What's up with that?

Doing a large number of retail leases, this is something I have had to deal with for national credit tenants for quite a while. And the truth of the matter is, with the big players, we almost always give in.

But you are right in that a larger number of smaller, less credit-worthy tenants are asking for it more these days. I have given in some times, and not others. A few compromises I have used (representing both landlords and tenants) is the reduction to present value/offsetting against market value; inserting a liquidated damages clause in its stead (anywhere from 3-12 months rent depending on what the market could justify); and bumping up security deposits to offset the losses. I also am careful to advise landlords of their need to stay on top of defaulting tenants and of how they will need to proceed in the future in the event of a default - i.e., pay my litigation partners lots of money to go after ongoing defaults. But again you are right in that landlords today just want filled space, and are often willing to risk that the space may be empty again in 9 months without fully adequate remedies against the tenant - but I tell them and let them decide.

Scott A Frank
Attorney at Law
ARNSTEIN & LEHR LLP
www.arnstein.com http://www.arnstein.com/

515 North Flagler Drive
Sixth Floor
West Palm Beach, Florida 33401-4323
Phone: 561.833.9800
Fax: 561.655.5551

433 Plaza Real
Suite 275
Boca Raton, Florida 33401-4323
Phone: 561.962.4145
Fax: 561.962.4245
SAFrank@arnstein.com mailto:SAFrank@arnstein.com

Offices in Illinois, Florida, and Wisconsin

From: landten-bounces@lists.flabarrpptl.org [mailto:landten-bounces@lists.flabarrpptl.org] On Behalf Of George Pincus
Sent: Tuesday, February 23, 2010 2:38 PM
To: RPPTL Landlord Tenant Committee
Subject: [RPPTL LandTen] Accelaration Clauses - What's up with that?
Is it just me or is every tenant on the planet trying to negotiate acceleration clauses out of leases?

How are you responding to this in this tenant oriented market?

What are you saying to your landlord clients when they look at you and say "I need to plug the whole in my building, I don't care what the tenant is asking for - get this deal done ", knowing that someday they will come back and say to you "how could you let me sign a lease without an acceleration clause in the remedies section?"

I am dealing with this every day, so I am interested in how other people are responding to this issue.

Thanks.

George A. Pincus, Esq.
Shareholder
Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A.
New River Center, Suite 2100
200 East Las Olas Boulevard
Ft. Lauderdale, FL 33301
Telephone: 954-766-9705
Facsimile: 954-766-9719
E-mail: gpincus@stearnsweaver.com mailto:gpincus@swmwas.com
www.stearnsweaver.com

CONFIDENTIALITY NOTICE: The information contained in this E-mail message is attorney privileged and confidential information intended only for the use of the individual(s) named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copy of this communication is strictly prohibited. If you have received this communication in error, please contact the sender by reply E-mail and destroy all copies of the original message. Thank you.

CIRCULAR 230 DISCLOSURE: To ensure compliance with recently-enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including any attachments, is not intended or written by us to be used, and cannot be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government or for promoting, marketing or recommending to another party any tax-related matters addressed herein.

This electronic mail transmission may contain confidential or privileged information.

If you believe that you have received this message in error, please notify

the sender by reply transmission and delete the message without copying or disclosing it.

Pursuant to Internal Revenue Service guidance, be advised that any federal tax

advice contained in this written or electronic communication, including any

attachments or enclosures, is not intended or written to be used and it cannot

be used by any person or entity for the purpose of (i) avoiding any tax penalties

that may be imposed by the Internal Revenue Service or any other U.S. Federal

taxing authority or agency or (ii) promoting, marketing or recommending

to another party any transaction or matter addressed herein.

Thanks to Scott Frank, David Drobner, Charles Levin and Neil Shoter for their thoughtful replies (and to Art Menor for commiserating with me on the phone). An annual acceleration remedy, with a duty to mitigate (less costs of mitigation and some language about not having to take way below market deals as part of the duty to mitigate) is where I am coming out on this issue, with a stern warning to clients that they cannot come back and blame me for a remedies clause to which they agreed which is different from what they were used to in the good old days when landlord's had leverage. Perhaps yesterday's e-mail was more of a vent/cry for help in a moment of severe frustration, but I appreciate the members of the group taking the time to respond. George A. Pincus, Esq. Shareholder Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. New River Center, Suite 2100 200 East Las Olas Boulevard Ft. Lauderdale, FL 33301 Telephone: 954-766-9705 Facsimile: 954-766-9719 E-mail: gpincus@stearnsweaver.com<mailto:gpincus@swmwas.com> www.stearnsweaver.com<http://www.stearnsweaver.com> From: landten-bounces@lists.flabarrpptl.org [mailto:landten-bounces@lists.flabarrpptl.org] On Behalf Of Frank, Scott A. Sent: Tuesday, February 23, 2010 2:47 PM To: RPPTL Landlord Tenant Committee Subject: Re: [RPPTL LandTen] Accelaration Clauses - What's up with that? Doing a large number of retail leases, this is something I have had to deal with for national credit tenants for quite a while. And the truth of the matter is, with the big players, we almost always give in. But you are right in that a larger number of smaller, less credit-worthy tenants are asking for it more these days. I have given in some times, and not others. A few compromises I have used (representing both landlords and tenants) is the reduction to present value/offsetting against market value; inserting a liquidated damages clause in its stead (anywhere from 3-12 months rent depending on what the market could justify); and bumping up security deposits to offset the losses. I also am careful to advise landlords of their need to stay on top of defaulting tenants and of how they will need to proceed in the future in the event of a default - i.e., pay my litigation partners lots of money to go after ongoing defaults. But again you are right in that landlords today just want filled space, and are often willing to risk that the space may be empty again in 9 months without fully adequate remedies against the tenant - but I tell them and let them decide. Scott A Frank Attorney at Law ARNSTEIN & LEHR LLP www.arnstein.com<http://www.arnstein.com/> 515 North Flagler Drive Sixth Floor West Palm Beach, Florida 33401-4323 Phone: 561.833.9800 Fax: 561.655.5551 433 Plaza Real Suite 275 Boca Raton, Florida 33401-4323 Phone: 561.962.4145 Fax: 561.962.4245 SAFrank@arnstein.com<mailto:SAFrank@arnstein.com> Offices in Illinois, Florida, and Wisconsin ________________________________ From: landten-bounces@lists.flabarrpptl.org [mailto:landten-bounces@lists.flabarrpptl.org] On Behalf Of George Pincus Sent: Tuesday, February 23, 2010 2:38 PM To: RPPTL Landlord Tenant Committee Subject: [RPPTL LandTen] Accelaration Clauses - What's up with that? Is it just me or is every tenant on the planet trying to negotiate acceleration clauses out of leases? How are you responding to this in this tenant oriented market? What are you saying to your landlord clients when they look at you and say "I need to plug the whole in my building, I don't care what the tenant is asking for - get this deal done ", knowing that someday they will come back and say to you "how could you let me sign a lease without an acceleration clause in the remedies section?" I am dealing with this every day, so I am interested in how other people are responding to this issue. Thanks. George A. Pincus, Esq. Shareholder Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. New River Center, Suite 2100 200 East Las Olas Boulevard Ft. Lauderdale, FL 33301 Telephone: 954-766-9705 Facsimile: 954-766-9719 E-mail: gpincus@stearnsweaver.com<mailto:gpincus@swmwas.com> www.stearnsweaver.com ________________________________ CONFIDENTIALITY NOTICE: The information contained in this E-mail message is attorney privileged and confidential information intended only for the use of the individual(s) named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copy of this communication is strictly prohibited. If you have received this communication in error, please contact the sender by reply E-mail and destroy all copies of the original message. Thank you. ________________________________ CIRCULAR 230 DISCLOSURE: To ensure compliance with recently-enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including any attachments, is not intended or written by us to be used, and cannot be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government or for promoting, marketing or recommending to another party any tax-related matters addressed herein. This electronic mail transmission may contain confidential or privileged information. If you believe that you have received this message in error, please notify the sender by reply transmission and delete the message without copying or disclosing it. Pursuant to Internal Revenue Service guidance, be advised that any federal tax advice contained in this written or electronic communication, including any attachments or enclosures, is not intended or written to be used and it cannot be used by any person or entity for the purpose of (i) avoiding any tax penalties that may be imposed by the Internal Revenue Service or any other U.S. Federal taxing authority or agency or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

landten@lists.flabarrpptl.org

[RPPTL LandTen] Accelaration Clauses - What's up with that?