Archive for February, 2011
By Christopher Huntley, Attorney
In the current economic market landlords are increasingly facing defaulting tenants that are not making their rent payments or undertaking their lease obligations. Some of these tenants simply close up shop, hand over the keys to the landlord, and abandon their premises. Such an act by the tenant, and the landlord’s subsequent response to the tenant’s actions, can potentially have severe negative repercussions on the landlord’s ability to enforce the lease and go after the tenant for unpaid rent and other outstanding obligations. The problem is that most landlords are unaware of the consequences of their response.
What are the Repercussions of a Surrender?
Many tenants abandon their premises and attempt to evade lease obligations when they no longer desire to use their lease space. Such a unilateral act, however, has no legal impact on the landlord’s ability to enforce the lease and collect past due rent. It is only when the landlord “accepts” the surrender of the tenant’s leasehold interest that the landlord’s rights are curtailed. The surrender by the tenant, and the landlord’s subsequent acceptance, has the legal effect of terminating the lease and relieving the tenant from future obligations. Under such a scenario the landlord will only be able to recoup lost rent or enforce lease covenants for obligations that arose through the date that the landlord is deemed to have accepted the tenant’s surrender.
The problem is that many landlords do not realize that they are accepting the tenant’s surrender. Any activity that is considered incompatible with the continued existence of a landlord-tenant relationship will be deemed such an acceptance. This could include acts as simple as a landlord re-entering a tenant’s premises in connection with enforcing its rights, the landlord accepting keys from a tenant without objecting to the tenant abandoning its premises, or the landlord changing the locks on the doors to the tenant’s premises. There are many factors that a court will consider in finding such an acceptance and which, taken individually, seem to be innocuous. Taken as a whole, these factors may all lead to a court finding that the landlord has terminated the lease.
Luckily, a court will only find that a lease has been terminated if the landlord takes unequivocal steps towards accepting a surrender, and the tenant has the burden of proving this. However, there are far too many cases where courts have found an acceptance by an ignorant landlord, and the repercussions of this scenario are far too severe, to take this issue lightly.
How Do I Avoid Accepting a Surrender? (more…)
Monthly columns in Finance and Commerce and Capitol Report feature topics raised by research managed by NAIOP Minnesota’s Nexus Task Force (NTF) and conducted by the Minnesota Taxpayers Association (MTA). These columns are orchestrated by NAIOP Minnesota and authored by Mark Haveman, MTA.
Read the February column, Claims of a property tax crisis outstate may be overblown, appearing in the February 11th issue of Finance & Commerce.
The ability to pay taxes is a function of how the economy is doing, and at least in some outstate areas, communities have appeared to weather the recession reasonably well. Department of Revenue data indicates that from 2008-2010— representing the heart of the Great Recession—total commercial and industrial property values fell by over $3.2 billion just in Hennepin County alone. Commercial-industrial property values in Anoka, Washington, Dakota, and Ramsey counties declined by an additional $1.7 billion. But 54 of Minnesota’s 87 counties experienced commercial-industrial property value increases during this period and 13 counties actually experienced double digit growth. This is important because Minnesota businesses are finding themselves in the political crossfire on the controversial issue of aids to local governments.
Imagine, the ability to easily understand how your taxes are being spent and how those using them are being held accountable. But the efforts by NAIOP, MTA, and the chamber at least point us in the right direction. Read more.
The NAIOP Chapter Merit Awards were held on February 9, 2011 in Washington DC, and we are pleased to announce that NAIOP Minnesota was awarded the Merit Award in the Technology category for our chapter blog, e-newsletter, and website.
This year has been a big year of technology for the Minnesota Chapter, and specifically the Communications Committee. The committee has worked to leverage the blog, the NAIOP Pulse, by tying it to other publications such as our quarterly electronic newsletter, monthly e-newsletter, educational program invitations and reminders, and the chapter website. In 2010 the Universe quarterly newsletter went completely digital, and the committee works to link readers to the Pulse so they can comment on featured stories and view full photo galleries from chapter events.
One area highlighted in the award recognition was the fact that several representatives from the Communications Committee posted live updates from the course at the chapter’s annual golf tournament in July, creating a visible presence for the Pulse at one of the chapter’s most popular events. Golfers could get instant updates on their smart phones, and members who were not able to attend the event could follow along from their office. Golfers and non-golfers alike posted comments, and the golf blog post was one of our most highly trafficked of the year.
Congratulations to all members of the Communications Committee for your hard work and innovation on behalf of NAIOP Minnesota.
For release from the Nexus Task Force on February 15, 2011:
the Open Government in Minnesota Report
The many publications and resources designed to help taxpayers navigate and understand Minnesota’s property tax system, do a great job of discussing the interconnected pieces of the system and how they work. But the most influential part of the property tax system is local government spending. It ultimately drives property tax levies, and in turn, property taxpayers’ bills.
This 16 page report examines the issues impacting the ability of property taxpayers to make informed judgments about local spending and the use of their property tax dollars and identifies three requirements to enhance those judgments.
Applause for bill to limit business property tax and bipartisan support on plan to reduce ‘burdensome’ levy.
“The proposed reduction in state property taxes was hailed by the Commercial Real Estate Development Association.”
Read the article on Senate File 1, appearing in Finance and Commerce on February 2nd.
Orchestrated by NAIOP’s Nexus Task Force and authored by Mark Haveman was the headlining commentary from the Opinion Exchange section of Sunday, January 30th’s Star Tribune. Material for this article was taken from the Minnesota Public Sector Compensation Report, released by the Nexus Project in December.
Public-worker pay is disconnected from results. Without change, we consign ourselves to lower services, higher taxes, or both.