[WSBARP] early termination clause
Lisa Schuchman
lisa at lisaschuchman.com
Thu Mar 13 14:12:40 PDT 2014
Here are two slightly different versions.
1. DAMAGE OR DESTRUCTION: In case the improvements on the leases premised
are destroyed or damaged by fire, earthquake, or other casualty during the
term of this lease, Lessor may elect, at its option, not to restore or
rebuild the premises and shall so notify Lessee, in which event Lessee
shall vacate the premises and this Lease shall be terminated; or, in the
alternative, Lessor shall notify Lessee, within thirty (30) days after the
notice of such casualty, that Lessor will undertake to rebuild or restore
the premises, and that such work can be completed within one hundred
eighty (180) days from date of such notice of intent. If Lessor cannot
restore or rebuild the premises within the said one hundred eighty (180)
days, then the Lease may be terminated at Lessee's option by written ten
(10) day notice to Lessor. During the period of untenantability, rent
shall abate in the same ratio as the portion of the premises rendered
untenantable bears to the whole of the premises. In the event that the
lease is not terminated, the Lessor may rebuild and restore, at its
expense and with reasonable diligence, the damaged or destroyed portions
of the premises as nearly as practicable to the condition they were in
prior to such damage or destruction, provided, however, that the
requirement to rebuild and restore the premises shall not extend to any
furnishings, fixtures, or equipment which the Lessee has previously
installed in the premises, whether or not title to such items as passed to
Lessor under other provisions of this lease. Notwithstanding any other
provision of this paragraph to the contrary, in the event that there are
insufficient insurance proceeds available to Lessor to rebuild and restore
the premises damaged by casualty, Lessor shall have the right, at its
option, to terminate the lease.
2. Destruction of Premises. In the event of a total or partial
destruction of the said premises during said term from any cause, the
Lessor shall forthwith repair the same, provided such repairs can be made
within 180 days under the laws and regulations of state, federal, county,
or municipal authorities, but such partial destruction shall in no wise
annul or void this Lease, except that the rent reserved to be paid
hereunder shall be equitably adjusted according to the amount and value of
the undamaged space.
Should the total or partial destruction result from causes covered by the
fire and extended coverage insurance furnished by the Lessee, the
insurance proceeds shall be made available to the Lessor to effect the
required repairs. In the interests of expediency, the Lessee may, at its
option, elect to make the necessary repairs, in which event the insurance
proceeds shall be made available to the Lessee for such purpose.
If such repairs cannot be made within 180 days, this Lease may be
terminated at the option of either party.
Lisa E. Schuchman
206-325-2801
www.lisaschuchman.com <http://www.lisaschuchman.com/>
Education is what you get when you read the fine print. Experience is
what you get when you don’t. -Pete Seeger
NOTE: I do not use encrypted email. Messages sent to or from my office
via email are not secure and may not be protected by attorney-client
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Any tax advice included in this document and its attachments was not
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P Please consider the trees before printing this document
From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Jodi Bourg
Sent: Thursday, March 13, 2014 2:05 PM
To: wsbarp at lists.wsbarppt.com
Subject: Re: [WSBARP] early termination clause
Does anyone have an early termination clause for the lessee, such as in
the event of an emergency or catastrophic event that they would be willing
to share?
Thanks again.
Jodi
_____
From: "Jodi Bourg" <jlbourg at comcast.net>
To: wsbarp at lists.wsbarppt.com
Sent: Thursday, March 13, 2014 1:57:18 PM
Subject: Re: [WSBARP] default clause in commercial lease
Thanks to you both, Patrick and Lisa.
_____
From: "Patrick F. Hussey" <phussey at AndersonHunterLaw.com>
To: wsbarp at lists.wsbarppt.com
Sent: Thursday, March 13, 2014 1:49:45 PM
Subject: RE: [WSBARP] default clause in commercial lease
While you can put such a default clause in the commercial lease – and most
have them – keep in mind that if the lessee files bankruptcy/other type of
insolvency, and wants to cure the default and assume/assign the lease,
these types of clauses are not enforceable; called ipso facto clauses.
See 11 USC 365 (b)(2), part of the Bankruptcy Code dealing with executory
contracts and leases.
Patrick F. Hussey | Anderson Hunter Law Firm
2707 Colby Avenue, Suite 1001 | Everett, WA 98201
Phone: (425) 252-5161 ext. 102 | Fax: (425) 258-3345
phussey at andersonhunterlaw.com | www.andersonhunterlaw.com
<http://www.andersonhunterlaw.com/>
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From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Jodi Bourg
Sent: Thursday, March 13, 2014 1:42 PM
To: wsbarp at lists.wsbarppt.com
Subject: Re: [WSBARP] default clause in commercial lease
But you provide an opportunity to cure the default, don't you? The form
I'm looking at right now has nothing in it regarding Lessee's ability to
cure.
_____
From: "Lisa Schuchman" <lisa at lisaschuchman.com>
To: wsbarp at lists.wsbarppt.com
Sent: Thursday, March 13, 2014 1:37:57 PM
Subject: RE: [WSBARP] default clause in commercial lease
Jodi,
I’ve usually seen it in commercial leases. I usually add failure to pay
to declare default, not just bankruptcy, etc.
Lisa E. Schuchman
206-325-2801
www.lisaschuchman.com <http://www.lisaschuchman.com/>
Education is what you get when you read the fine print. Experience is
what you get when you don’t. -Pete Seeger
NOTE: I do not use encrypted email. Messages sent to or from my office
via email are not secure and may not be protected by attorney-client
privilege. This email address is not monitored at all times. If your
matter is urgent, please phone my office during regular business hours.
Any tax advice included in this document and its attachments was not
intended or written to be used, and it cannot be used, for the purpose of
avoiding penalties under the Internal Revenue Code.
P Please consider the trees before printing this document
From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Jodi Bourg
Sent: Thursday, March 13, 2014 1:35 PM
To: WSBARP Listserv
Subject: [WSBARP] default clause in commercial lease
Listmates,
Has it become standard for a default clause in a commercial lease to
include a lessee's filing bankruptcy, insolvency or liquidation as an
event of default?
Thanks.
Jodi Bourg
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