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

[George Pincus]

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 at stearnsweaver.com<mailto:gpincus at swmwas.com>
www.stearnsweaver.com<http://www.stearnsweaver.com>





From: landten-bounces at lists.flabarrpptl.org [mailto:landten-bounces at 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 at arnstein.com<mailto:SAFrank at arnstein.com>

Offices in Illinois, Florida, and Wisconsin


________________________________
From: landten-bounces at lists.flabarrpptl.org [mailto:landten-bounces at 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 at stearnsweaver.com<mailto:gpincus at swmwas.com>
www.stearnsweaver.com



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