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Relocation Rights in Leases - Planning for the Future
Relocation Rights in Leases - Planning for the Future
Relocation Rights in Leases - Planning for the Future
Relocation Rights in Leases - Planning for the Future
Relocation Rights in Leases - Planning for the Future
Relocation Rights in Leases - Planning for the Future
Relocation Rights in Leases - Planning for the Future
Relocation Rights in Leases - Planning for the Future
Relocation Rights in Leases - Planning for the Future
Relocation Rights in Leases - Planning for the Future
Relocation Rights in Leases - Planning for the Future
Relocation Rights in Leases - Planning for the Future
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Relocation Rights in Leases - Planning for the Future

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This presentation was prepared by FMC's Sheldon Disenhouse for the Fall Real Estate Seminar. It looks at Relocation Rights in Leases with a focus on Standard Lease Provisions, Landlord Rationale, …

This presentation was prepared by FMC's Sheldon Disenhouse for the Fall Real Estate Seminar. It looks at Relocation Rights in Leases with a focus on Standard Lease Provisions, Landlord Rationale, Tenant Concerns and related cases.

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  • 1. Relocation Rights in Leases – Planning for the FutureFMC Fall Real Estate Seminar, September 27, 2012Presented by:  Sheldon Disenhousesheldon.disenhouse@fmc‐law.com 1
  • 2. Standard Lease Provisions• “The Landlord may…relocate or rearrange the buildings, parking facilities  and other parts of the Project and [with the consent of the Tenant, which  consent will not be unreasonably withheld], relocate or rearrange the  Premises from that shown on Schedule “A”. 2
  • 3. • “The Landlord shall have the right, in its sole discretion, from time to time,  to relocate the Premises to other premises within the Project having  approximately the same area as the Premises. The Landlord shall be  entitled to designate the location of the new premises and the date by  which the Tenant must relocate to the new premises.” 3
  • 4. Landlord Rationale• Desire to upgrade the Project/Flexibility  – Renovations – Better/larger tenants – Remerchandising – Expansion room for adjacent/large tenants 4
  • 5. Tenant Concerns• What is “comparable space” – Retail • Size • Frontage • Tenant mix • Proximity to entrances, exits, major tenants • Availability of services – Office • Height in building (low floors/high floors) • Views • Availability of services• Will there be down‐time?• Timing (not during high season) 5
  • 6. Who Pays What?• Usually the move is at the Landlord cost – Construction of new space • Plans • Base building • Leasehold improvements – Move existing fixtures/purchase new fixtures – Actual move • Timing – Signage/announcements – Stationery – Indirect costs – Unamortized costs 6
  • 7. CASES 7
  • 8. • 1. Can Landlord relocate Tenant to a neighboring Project? – No – unless specifically provided for. See: Millennium Veterinary Hospital Corp. v. SR & R Bay Bridges Ltd. 66    R.P.R. (4th) 174 (2008‐OCA) 8
  • 9. 2. What does “in a location, size and finish similar to that of the Demised  Premises” mean? Court → “…a proper interpretation … of the words “similar location” would  indicate compatibility with the business – attractive features of the  originally agreed location, which would include criteria of shopper traffic  flow, visibility and exposure.”See: Stonegate Enterprises Ltd. V. West Oaks Mall Ltd. 1 R.P.R. (4th ) 113  (2002‐BCSC) 9
  • 10. 3.  Negotiate!“The Landlord shall have the right…to change the location of the leased  premises…to another location of comparable size in the shopping mall…”Court → “Although the existing area has both street and mall frontage, the  tenant by executing the lease and including this relocation clause put itself  in the position whereby it was at the mercy of the landlord with regard to  relocation. As was clear from the evidence some tenants negotiated this  clause out of their agreement…”St. John’s Development Corp. v Eyeland Enterprises Inc. 1998 Carswell Nfld 264 (Nfld SC, Trial Division) 10
  • 11. Relocation Rights in Leases – Planning for the FutureFMC Fall Real Estate Seminar, September 27, 2012
  • 12. The preceding presentation contains examples of the kinds of issues companies dealing with real estate could face.If you are faced with one of these issues, please retain  professional assistance as each situation is unique.

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