Friday, September 19, 2008

Lease disputes go to a new level - red rooftops at Wrigley Field

The new owner of the so-called "Budweiser Building" across from the outfield of Wrigley Field (I remember when it was the "WGN Building") is in a tizzy with Bud over the rent. (The owner, by the way, is Tom Gramatis, who was in a tiff with Tribune Company over revenue sharing at his three rooftop clubs that ghe also owns.)

Apparently the new owner bought the building and there's a dispute as to the September rent payment. The owner has purported to terminate the rooftop lease and has inked a contract with a sign company to re-lease the space.

I have not read the lease, so I cannot say who is right here. I truly see both sides of the story.

When representing a tenant, I usually like to provide some notice and cure period -- even for rent -- before a lease can be terminated. And on the landlord's, I usually allow that. Why? Checks get lost in the mail. And apparently this was in the lease but A-B didn't pay anyway.

On the other hand, Anheuser-Busch claims it never got an invoice for the September rent. So? Are you telling me the lease requires an invoice? Somehow I doubt that, but A-B claims it was. Assuming A-B knew where to send the money, it probably should have. The "I need a phone and fax number" excuse is a little lame, but the FEIN requirement is a little less so, especially if A-B's claim that it was required under the lease is true. You need to know who your vendors are. But then, do you want to risk a lucrative contract for such a detail? Not my call here.

Now, maybe the buyer wanted to get rid of the tenant (gee, you think? The World Series being a possibility and all that), but I can't say for sure and I certainly do not want to cast any aspersions on the landlord. That would not be fair. After all, the landlord has a right to timely payment of rent, and if it does not receive the rent, it is well within its rights to terminate the lease, and if that means more money in its pockets, that's the American Way!

In a deal like this, here's what I would have done (and for all I know, it was here): the buyer should have demanded an estoppel certificate from the tenant stating that the lease was in effect, negotiated a document subordinating the lease to a mortgage (if required by the lender), and then, most importantly, the old owner and new owner should jointly have sent a letter to A-B notifying it of the sale and directing where rent was to be paid. In any event, notice to the tenant of the sale will probably a factor the judge will focus on in deciding this matter and determining whether the lease is still valid.

0 comments:

 
-