Unclear on the concept
May. 25th, 2011 11:50 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
bktheirregularRental of properties can sometimes get ... interesting. In the Chinese-curse sense of the word.
Case in point: one of our clients leases spaces for its shops, and sometimes it's subleasing the space from someone who's leasing it in turn. I've seen that nested-sublease thing go several layers deep, which leads to a potentially serious problem.
If our client is four tiers down in a nested sublease, and someone on one of the higher tiers breaches its lease, then the higher-tier lessee suddenly no longer has the right to sublease the property, all the subleases down the line are suddenly invalid, and our client, who's spent money and time to open a store and do business at that location, might end up getting evicted through no fault of its own.
Now, I may have mentioned before that the first law we learn in law school in the US is basically Murphy's; all those thick, expensive casebooks are stuffed to the gills with examples of things going badly, spectacularly wrong. So, we draft our contracts accordingly, and laws are written accordingly.
So what happens when a superior lessee breaches its superior lease, and our client finds itself up the creek? Well, I found examples in other legal jurisdictions where a sublessee can ask for parallel agreements with whoever it's leasing from and the ultimate owner of the property, that if the leases further up the chain come crashing down, the lessee at the bottom of the chain (the one actually using the property) will automatically enter into a new lease with the owner at the top of the chain on basically the same terms. It's a precaution, one everyone hopes will never be needed.
But since Murphy's Law is remarkably resistant to the influence of bribery, naturally, things do go wrong.
Long story short, property owner and superior lessee get into a legal squabble. Client goes cross-eyed, asks: so where does the rent money go? Client doesn't want to be in default on the rent, but who gets the rent is part of the dispute. Thankfully, there's a procedure for that: a new escrow account can be established with a government deposits-and-loans fund, rent money goes there, and whoever ends up with the right to the rent money gets to take it from the account when the legal tussle is settled.
Fair enough, right? Until one of the parties sends out an extra-judicial demand that the money be paid into that account with the condition that only that one party can access the money.
Client asks: are these guys serious?
Law firm partner, on being asked to draft a response, asks: are those guys serious?
Your friendly correspondent (hi!), on being asked to translate the formal response, says: this can't be right. Am I reading this right? I mean, doesn't this kind of defeat the whole purpose of the escrow account?
...on the bright side, I guess I'm getting good enough at deciphering the language to pick up elements of insane troll logic.
Case in point: one of our clients leases spaces for its shops, and sometimes it's subleasing the space from someone who's leasing it in turn. I've seen that nested-sublease thing go several layers deep, which leads to a potentially serious problem.
If our client is four tiers down in a nested sublease, and someone on one of the higher tiers breaches its lease, then the higher-tier lessee suddenly no longer has the right to sublease the property, all the subleases down the line are suddenly invalid, and our client, who's spent money and time to open a store and do business at that location, might end up getting evicted through no fault of its own.
Now, I may have mentioned before that the first law we learn in law school in the US is basically Murphy's; all those thick, expensive casebooks are stuffed to the gills with examples of things going badly, spectacularly wrong. So, we draft our contracts accordingly, and laws are written accordingly.
So what happens when a superior lessee breaches its superior lease, and our client finds itself up the creek? Well, I found examples in other legal jurisdictions where a sublessee can ask for parallel agreements with whoever it's leasing from and the ultimate owner of the property, that if the leases further up the chain come crashing down, the lessee at the bottom of the chain (the one actually using the property) will automatically enter into a new lease with the owner at the top of the chain on basically the same terms. It's a precaution, one everyone hopes will never be needed.
But since Murphy's Law is remarkably resistant to the influence of bribery, naturally, things do go wrong.
Long story short, property owner and superior lessee get into a legal squabble. Client goes cross-eyed, asks: so where does the rent money go? Client doesn't want to be in default on the rent, but who gets the rent is part of the dispute. Thankfully, there's a procedure for that: a new escrow account can be established with a government deposits-and-loans fund, rent money goes there, and whoever ends up with the right to the rent money gets to take it from the account when the legal tussle is settled.
Fair enough, right? Until one of the parties sends out an extra-judicial demand that the money be paid into that account with the condition that only that one party can access the money.
Client asks: are these guys serious?
Law firm partner, on being asked to draft a response, asks: are those guys serious?
Your friendly correspondent (hi!), on being asked to translate the formal response, says: this can't be right. Am I reading this right? I mean, doesn't this kind of defeat the whole purpose of the escrow account?
...on the bright side, I guess I'm getting good enough at deciphering the language to pick up elements of insane troll logic.
