My friend, Hank Jordan, an author and writer of copy for businesses [ed. note: check out his website: JordanAssociates], sent me a link to an amazing world clock. It not only tells you the time in various cities and time zones, but it also has a running total of the national debt (currently $42,963 per person in the U.S., and $120,209 per taxpayer).

There are  8 main sections of the clock: World Time; Population; Death; Illness; Environment; US Crimes, Food; and a 9th called More.  Checking out the Population section makes one realize that of the 6.8 billion people in the world almost 36% live in China and India! You can discover that Cardiovascular diseases, so far in 2010, account for almost 11 Million deaths, approximately 29% of the total. A startling 34 million people are living with HIV. Take a look at the Environment section and see how much forest land were losing. It’s disheartening. According to the Energy section, we have 13,872 until our oil id depleted. I was startled to see that in 2010, so far, the identity of almost 61 million U.S. residents has been stolen.

Did you know that more ducks are slaughtered in the U.S. than beef? Can you guess what it the most slaughtered animal in the U.S. without checking the Food section?

Take a few moments and check out this interesting site, and pass this on to your friends: world clock.

If you live in a home subject to a Homeowners Association (HOA) you may be interested in checking out my recent article on what happened to some owners when they tried to defy their HOA architectural control provisions: www.carlsbadrealtynews.com

You have leased space in a Carlsbad office/warehouse building, and your lease provides that you are responsible for interior maintenance of the premises and the landlord is responsible for the roof, exterior walls etc.

The Accident

Last year a customer walked into your office, and slipped in a puddle of water caused by a roof leak that you had complained about to the landlord, which had not been repaired at the time of the accident. The customer suffered a broken back, had major medical bills, loss of work, and possible long-term disability.

The lawsuit

Guess who gets sued!  Right, both you and the landlord. Fortunately, your insurance company settles with the accident victim, and your insurance company proceeds with the claim against the landlord. It becomes a battle between your insurance company and his insurance company. Your insurance company is claiming that the landlord should pay your insurance company for the money it paid out to the accident victim to settle the matter.

The landlord argues that the lease required you to obtain insurance, which you did, and that the Indemnification clause of the lease meant that you had to cover any damages resulting from an injury in your leased premises.

The Indemnification

So you look at your lease, and you find the indemnification clause that reads: “Tenant hereby indemnifies and agrees to save harmless landlord from and against all claims, unless such claims are caused solely (my emphasis added) by the acts or omissions of landlord, which either: (1) arise from or are in connection with the possession, use, occupation, management, repair, maintenance, or control of the Premises or any portion thereof; (2) arises from or are in connection with any act or omission of Tenant’s or Tenant’s agents; or (3) result from any default, breach, violation or non-performance of this lease or any provision of this lease by tenant.

Your insurance company’s attorney argues that the puddle on the floor was caused by the roof leak that had not been repaired after your reported the problem, and that the landlord was liable.  The landlord’s attorney argues that there was a roof leak, but you failed to maintain the premises properly and that you should have dried up the puddle so the landlord was not solely responsible for the accident.

Who wins?

You be the judge. The lesson is that one word, out of the thousands, in the lease can dramatically affect your rights and obligations. Be sure you have a knowledgeable real estate agent helping guide you, and have your lease reviewed by your real estate attorney before signing it!

We now get to the A of SNDAs (Subordination, Non-disturbance, and Attornment Agreements in leases.) First a brief recap of Subordination and Non-Disturbance. You may remember from our previous articles that if you’re a tenant, and you’ve agreed to subordinate your interest in the lease to any mortgage, trust deed of other security device, and the holder of one of those security devices forecloses, your lease may be terminated. Leases usually provide for that subordination to security devises even if they are created after the lease commences. The non-disturbance clause protects you in the event of a foreclosure (or in the event the property is sold to another owner) by providing that if you’re not in default you’ll be able to keep your lease in effect.

The attornment clause stems from the old feudal law that there was a personal obligation between the lord of the manor and his tenants, and that those obligations were reciprocal. The consent of the lord was required for a sale of the tenant’s interest, and the consent of the tenant was required for alienation (sale/transfer) of the reversion or remainder interest in the property. Thus, the lord could not alienate his reversion or remainder interest without the consent of the tenant. The consent was called an attornment. The necessity for an attornment was abolished before the American Revolution by the English Statute of Anne. In California, the common law rule eliminating the requirement of attornment has been confirmed by statute. However, just to be sure, leases contain an attornment clause that provides that if title to the property is transferred by the Lessor or if title is acquired through foreclosure or termination of a Security Device the tenant will attorn to the new owner.

The language of the SNDA in each lease has to be examined carefully because there are differences that may result from the specific language of the three inter-related clauses. There are some interesting California cases involving the interpretation of SNDAs. Be sure to have the lease reviewed by California counsel before signing any lease.

Lee Sterling was a real estate lawyer in Colorado for 27 years. He is not licensed as an attorney in California. He does have a California real estate license # 01319489.

General Growth, the owner or manager of more than 200 malls in 44 states, which also owns office buildings and is involved in the management and development of master planned communities, filed the LARGEST real estate bankruptcy in U.S. history. So, what happens to its thousands of tenants in those malls and office buildings?

The bankruptcy code (Code) allows the debtor-in-possession (the landlord, for example) or the trustee of the bankrupt estate (hereinafter we’ll use Trustee to indicate either) to accept or reject executory contracts and unexpired leases (Sec. 365). As a result, the Trustee will usually affirm leases that are at or above market rent and reject those that are below market rent. Of course, the lessee of a below market rent would like to make sure it continues to have the right to occupy that space, and the lessee may want to retain the space even if it’s at market rent because of significant improvements the lessee may have made or the cost of moving may be prohibitive. Fortunately, if the lease is rejected, Section 365 provides that the lessee’s possessory rights are protected. However, the Trustee may be relieved of other provisions of the lease, such as the duty to provide services to the lessee.

What if the Trustee wants to sell the property that you have leased? Section 363 of the Code allows the Trustee to sell the real property “free and clear” of any “interest,” in the property, and a lease has been held to be an “interest.” One case, in the Seventh Judicial Circuit, with its particular facts, has held that the right of the Trustee to sell the property free and clear of the lease under 363 of the Code trumps the rights under section 365 of the Code that gives the lessee the continued right to possession. The lessee, for some reason, had not objected to the sale; perhaps counting on the provisions of Section 365. The lessee lost the possessory rights to a warehouse they had built on the bankrupt’s property. In the First Circuit, in a different case, where the lessee had objected to the sale, the Court held that the lessee’s right to retain possession was not trumped by Section 363! If you’d like more information, an interesting discussion of the cases can be found at: http://is.gd/u8Sm and http://is.gd/u8qA

As soon as you hear that your landlord has filed bankruptcy or is contemplating filing bankruptcy, immediately contact competent bankruptcy counsel to protect your rights!

I received this video from a long-time friend from high school days. It was so interesting that I wanted to pass it on to my friends here in Carlsbad and Encinitas: