Percentage rent allows a retail landlord to benefit from a tenant’s success. In addition to the base rent, tenants will pay an additional rent based on some percentage of the tenant’s gross sales typically triggered by what is termed a “breakpoint”. New tenants asked to pay percentage rent are typically…
San Diego Business Lawyer Blog
Stock Purchase Agreements
Because of the inherent risk of fraudulent activity, the sale of stock is a highly regulated transaction by both state and federal authorities. Unfortunately, many corporate shareholders erroneously believe that privately held corporations do not have to worry about securities regulations because of the limited number of people involved and…
Radius Restrictions in Commercial Leasing
Landlords desire radius restrictions in commercial leases for two main reasons: where the landlord is entitled to percentage rent, a competing business within the restricted radius may dilute the landlord’s income; and more generally a competing business within the restricted radius can have a negative impact on the exclusive nature…
Business Litigation – Proving Your Claims
One of the most misunderstood concepts in litigation is the concept of proof. San Diego business owners know when someone or some other business has committed a wrong. They know if a business partner has stolen from them, when a deal has been broken or when someone fraudulently induced them…
Exclusive Use Clauses in Commercial Leasing
Exclusive use clauses in commercial leasing are important to both landlords and tenants, especially in the retail context. Landlords need to focus on the right tenant mixture, ensure that obligations to existing tenants are met and maintain the ability to attract new tenants. Prospective tenants need to know that a…
Why Damages Are So Important in Litigation
It may seem obvious that damages are important to litigation but it’s surprising how misunderstood the concept is amongst business owners and the general public. The misconception is understandable of course given the natural inclination to focus on wrong doing. Nonetheless, without damages (significant damages in most cases) the cost…
Buy-Sell Agreements
Starting a new company with business partners requires a careful understanding of each partner’s expectations and goals. Lengthy and detailed discussions amongst the prospective partners are common. Unfortunately, these expectations and goals aren’t always adequately memorialized in writing. Too often, partners rely on oral agreements – sometimes with respect to…
When Commercial Tenants File for Bankruptcy
Because federal bankruptcy law preempts California landlord/tenant law, it’s important that commercial landlords and tenants alike understand the process when a tenant has filed for (or is considering filing for) bankruptcy. The timing of a tenant’s bankruptcy is critical because once a tenant files for bankruptcy an automatic stay immediately…
Selling Shares of Stock in Your Privately Held Corporation
Whether or not to sell shares in a privately held corporation is often hotly debated among shareholders. In most cases, the shareholders are seeking a necessary cash infusion either because initial funding has run out before the company could reach its full potential or because the shareholders desire expansion. The…
What is Gross Negligence in Indemnification Clauses?
Commercial tenants are often perplexed when they realize that under the terms of their lease, they are responsible for damages that occur on the leased premises even if caused by the landlord’s own negligence. In most cases, the landlord’s liability for just about any scenario is limited to gross negligence…