Fix Your Lease Even if You Can’t Fix the Weather

From Ulmer’s Real Estate Advisor Law Blog

By Scott Kadish

I attended the recent ICSC Regional Law Conference in Columbus, Ohio. It was a great conference where I reconnected with many great colleagues – including my son Kendall who is only in his second year practicing law, but recently took advantage of his Dad in a lease negotiation where he represented an escape room tenant and his Dad represented the landlord.

Richard Tranter’s presentation on the need for retail to be experiential was great. But Kendall explained it best when he said “a successful retail experience is one where people want to post an Instagram picture about the experience.” I am definitely stealing that.

The best presentation was actually about cannabis, which is a fast-growing retail industry with very interesting legal issues. As you can imagine, attendance for this presentation was high. (ha!)

At the conference, I led a discussion on casualty. I know, I know, that is all I ever speak about. I choose to believe that climate change has made extreme weather much more commonplace and casualty is now the most important provision in the Lease. Thus, the need for me to speak about it at every conference (as opposed to not being able to find anyone else who cares enough about it to spend their time on a presentation) is imperative. Pulitzer Prize winning journalist Sheri Fink has pointed out that the threat of extreme weather means we need to be prepared. Just saying that you really need to make it a point to attend my next presentation on casualty.

I did get some friends who were very nice and attended my discussion in Columbus. I won’t recreate the whole presentation here, but one important lease issue we discussed was extreme weather requiring a tenant to close. Is the tenant entitled to rent abatement even if there is no damage to the Premises or the Shopping Center? Most leases are drafted so as to not allow rent abatement in this case. But if the tenant is paying for the landlord’s loss of rent insurance, perhaps the lease should be revised to provide rent abatement.

As you might expect, a discussion among lawyers did not produce unanimous agreement. Although, everyone did agree that lease forms should be reviewed in light of the increasing occurrence of extreme weather. Unless you are George Carlin (who forecasted that it will be dark tonight), no one can really predict the weather. At least updating leases will actually allow you to do something about the weather instead of just complaining about it.