The 2016 ICSC Legal Conference was held in Hollywood, Florida on October 26-29. Friday night's theme was Hot Summer Night, which could describe not only the events taking place at the conference but also the subject matter of the sessions offered.
As usual, the Conference did not disappoint. It provides an excellent opportunity to meet with colleagues and to build the relationships that are so essential to the continued vitality of the industry. It is also a chance to discuss, and even debate, the hot legal topics of 2016. There were a number of topics that garnered significant time at this year's conference including the following:
• Estoppel Certificates. The content and process for preparing estoppel certificates was discussed at multiple sessions. A couple of items in particular are worth mentioning here. First, one speaker commented that ninety percent of the Leases that he works on include "attorney-in-fact" language which gives the Landlord the right to sign an estoppel certificate if the Tenant fails to do so. My initial reaction was to wonder why a Tenant would agree to this language. My second thought was to wonder under what circumstances a Landlord executed estoppel would be acceptable to the lender or buyer who will be relying on the document. Given that it is questionable that the Landlord would have legal authority to waive a Tenant's claims against the Landlord, a potential buyer or lender should be very hesitant to accept a Landlord executed estoppel.
Second, the conference was a good reminder to consistently re-evaluate your system for preparing estoppel certificates including determining whether all of the relevant persons with critical information are involved. For example, Tenants should make sure that the store manager, construction team, and legal department are involved in the document's preparation.
• Assignment and Sublet Rights. This topic received its usual amount of attention at the conference. An interesting issue that was raised at one session was whether New York's court created "voluntary surrender doctrine" could be argued in other states. The voluntary surrender doctrine provides that a Landlord and Tenant cannot collude to deprive a subtenant of its rights. It is not clear whether the arguments in favor of this court created doctrine would be received by the courts of other states in a positive manner.
• Landlord Relocation Rights. As usual, Landlord and Tenant representatives engaged in multiple lively discussions regarding the terms of a Landlord relocation right including how often/when the relocation can take place, why it can take place, how the relocation will take place (including the notice timing and responsibility for work), and where the Tenant will be relocated. What often is forgotten on the "where" issue is the need to ensure that Center directional signage is updated and the Tenant's storage may also need to be relocated. To this end, it is recommended that the storage relocation be addressed in the Lease or similar language be used in the Premises and storage area leases in order to avoid many long walks across the mall by retailer employees.
• Center Transactions. There is no question that there is significant purchase and sale movement in the marketplace. As such, purchase and sale transactions received increased attention at this year's conference. The due diligence process was a particular area of focus. During the course of those discussions, it became clear that there is a movement toward shorter due diligence periods, with many arguing for a timeline as short as twenty-one days. The consensus seemed to be that a thirty day due diligence period was acceptable in most transactions.
• Winn Dixie. The Winn Dixie cases made their way into almost every session. What remains clear from the cases is that it has never been more critical to ensure that exclusivity provisions are written in a manner to make them real covenants and with absolute clarity, even if that means not getting as broad of an exclusive right.
• Written Notices. The Notice section of a lease is often viewed as a boilerplate provision that does not get an intense review. However, the section did garner significant attention during the conference regarding whether parties are getting comfortable with using email as an official notice under a Lease. The resounding consensus is that parties are not yet comfortable but that the time is likely coming. In fact, most of the attorneys involved in the discussion liked to "paper" every required notice in as many ways as possible and available.
von Briesen & Roper Legal Update is a periodic publication of von Briesen & Roper, s.c. It is intended for general information purposes for the community and highlights recent changes and developments in the legal area. This publication does not constitute legal advice, and the reader should consult legal counsel to determine how this information applies to any specific situation.