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This blog focuses on real estate, land use and construction-related topics affecting Virginia and the Washington, D.C. metro area. With topics ranging from contract drafting and negotiation to local and regional land use project updates, the attorneys at Bean, Kinney & Korman provide timely insight and commentary on the issues affecting owners, builders, developers, contractors, subcontractors and other players in the industry. If you are interested in having us cover a specific topic, please let us know.

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The second headquarters for Amazon in Arlington, VA is obviously a hot topic in local commercial real estate. Much of the focus so far has been on projected residential price increases and increased commercial leasing. But, let’s not forget about the hotel industry. The forecast for much higher hotel traffic in the area was the reason the Transient Occupancy Tax was included in the incentive package negotiated by the state and local governments. 

In light of the recent holiday season, one thing that all construction industry professionals can agree on is that brand protection is a gift whose usefulness never ceases. You understand the significance of it. Your logo may appear on scaffolding, on the tops and sides of buildings or in trade publications. Your safety awards may adorn the walls of your places of business, and the finished products of your lucrative contracts remain the topics of conversation among those who are fortunate enough to live in, work at or otherwise experience the benefits of one or more of your projects.

While largely a focus of ad agencies and public relations companies, brand protection has practical and legal considerations worth considering:

The Washington, D.C. metropolitan area has no shortage of airplanes flying over the region. There is also no shortage of developers and landowners who want to create the region’s landmark buildings and skyscrapers which may fall within flight paths. These developers would rightfully be concerned that the Federal Aviation Administration (FAA) is proposing a change to its One Engine Inoperative (OEI) policy that could affect building height limits. The current proposal would allow the FAA to work with airport owners to define an OEI departure area from the runway.

January 29, 2013
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Commercial real estate landlords and the lenders for their tenants have competing interests with respect  to the tenant's personal property located at the demised premises. The landlord is looking to secure the tenant's rental obligations by taking a lien against the tenant's fixtures, inventory, and equipment located in the space, which may be particularly valuable in the case of  retail and restaurant tenants, while the tenant’s lender providing premises fit-out and/or working capital financing desires a security interest in the same property . The landlord’s lien may be created either by contract under the terms of the lease or through operation of law, and allows the landlord  to levy the property located at the demised premises of a  tenant who has failed to pay rent.  While the tenant would rather not allow either party to maintain a lien against its personal property, the tenant's action in this regard is often dictated by the requirements of its lender.  While  national retailers with strong credit typically have the leverage to insist on the  waiver or subordination of  their landlord’s lien rights, most smaller or regional tenants must navigate between their landlord's and lender's competing interests.  Part I will discuss the varied interests of the landlord and the tenant's lender in the tenant’s personal property are discussed in this article, and Part II will discuss suggested compromise solutions and a typical landlord waiver.  Note that the article that is the basis for this post first appeared in the December, 2012 issue of Commercial Leasing Law & Strategy. 

July 12, 2012
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Self-Help. Ok or Not?

“Self-help,” in a leasing context, typically refers to the landlord’s historical remedy of locking out a defaulting tenant and obtaining possession of the premises without going through judicial procedures. Traditionally under the common law, a landlord was subject to few limitations in choosing its remedies against a defaulting tenant, including the liberal use of self-help. However, modern jurisprudence provides tenants with much greater protection from eviction and also seeks to prevent possible violent landlord-tenant confrontations.  Therefore, the majority of states have now abolished the traditional rule of self-help and permit landlords to evict tenants only through court proceedings. In connection with the move away from self-help, most states have established summary eviction proceedings, which in theory provide landlords a more efficient and expedient method of retaking possession than traditional civil litigation.

June 22, 2012
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In this series we have been examining a landlord's duty to mitigate their damages after a default by the tenant.  Earlier we looked at the laws in the District of Columbia and Virginia.  An examination of Maryland's law is below.

June 4, 2012
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This series focuses on a commercial landlord's duty to mitigate their damges after a default by a tenant.  Earlier we discussed the District of Columbia's treatment of the duty to mitigate.  A discussion with respect to the law of Virginia is below, with Maryland to follow shortly. 

January 30, 2012
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We will discuss the commercial landlord's duty to mitigate damages after a default by tenant in Washington, D.C., Virginia and Maryland.  First, Washington, D.C. is as follows.

January 10, 2012
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A Landlord’s Duty to Mitigate in Washington, D.C., Maryland and Virginia

 

Under common law, a landlord had no duty to accept or procure a new tenant in order to mitigate damages (i.e., take reasonable action to avoid additional injury or loss) resulting from a tenant's breach of a lease, including with respect to an abandonment or refusal to occupy its premises. The rationale for this traditional view arose from the characterization of a lease as a conveyance of a real property interest, and not as a contract. In recent years, many states have enacted statutes applicable to residential landlords that impose a duty to mitigate damages.   There is no clear consistency, however, in the law regarding a commercial landlord's duty to mitigate damages. The modem trend, followed in approximately half of the states, is to require commercial landlords to mitigate damages. This modern view characterizes the lease as a contract rather than a conveyance of real estate, and it is an established principle of contract law that parties to an agreement have a duty to mitigate their damages. There are certain exceptions to the historical common law view that a landlord has no duty to mitigate, which in different variations, are currently recognized by some of the "traditional view" states. One exception imposes a duty to mitigate once the landlord re-enters the premises following an abandonment by the tenant. There are different standards as to what constitutes re-entry. For example, merely accepting the keys to the premises or keeping the premises in good repair would not typically be considered a re-entry. A second exception imposes a duty to mitigate on a landlord if the lease contains the common "re-entry clause," which permits the re-entry of the premises following abandonment of the premises by the tenant. The District of Columbia, as discussed below, is among the jurisdictions that follow this exception. 

 

We delve into a more legal, technical and lengthy post this week for a good reason — a recent decision from a Virginia trial court (PDF of decision) points to a new avenue for claims by buyers of real estate in Virginia.