Nuts & Bolts of Notice Letters

Last Updated on Tuesday, 11 September 2018 12:32 Written by Chris Griswold Tuesday, 11 September 2018 12:31

Notice Letters.  We all have written and gotten them.  We might even be waiting on one in the mail right now (I know I am).  From time to time, we all have something come up in one of our deals that requires that we either write one or cause one to be written.  In fact, during these turbulent economic times, you may find yourself writing or receiving these types of letters a little more often than you’d like!  Accordingly, I’d like to shed some light, in general terms, on what constitutes a good notice letter….  Good stuff for everyone.  See more below (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Nuts & Bolts of Notice Letters

If done correctly, they save the day.  If done wrong, someone is potentially in real trouble.  It’s funny that something so important is usually located at the end of the contract (or the lease), written in such small print and is typically treated (in its entirety) over the course of a mere two to three sentences, or less.  No wonder the old adage that “big things come in small packages” comes to mind when I think about the concept of notice letters.  Accordingly, I want you to walk away knowing three, basic things about the proper drafting and management of notice letters:

First, check the actual notice addresses for the other party (or parties) who are required to receive such notice.  These notice addresses are usually set forth in the first few pages of the contract; if not there, look at the end of the document.  Keep in mind that these addresses may have already changed.  Accordingly, look in your files for any letters, e-mails, contractual amendments and/or other correspondence received from this other party (or parties) which has changed their formal notice address.  Remember, it doesn’t do any good to write a fancy letter if the address is wrong….

Second, check the language usually located in the back of the contract which is most often entitled “Notices.”  The purpose of this language is to set forth exactly how notice shall be delivered and will commonly talk about how notice letters should be mailed “via certified mail return receipt requested” or by a “nationally recognized overnight courier.”  If it says that, be sure and do it.  You’d be surprised to know how many people deliver notice letters via first class or registered mail just to find out that they didn’t give the other party good and proper notice (tip: registered is not the same as certified; “registered” means “insured” and is used for insuring the value of parcels such as diamonds, precious metals, etc… while “certified” means “signed-for” which is the purpose of notice letters).

Third, remember that after you send out your notice letter and receive back the “green card” in the mail, you’re still not “out of the woods” as it were.  Why?  You have to actually keep up with the “green card” or other packaging receipt in order to prove, often months or even years later, that you delivered and the other party actually received the notice letter.  Oftentimes, I get calls from people to the effect that they know the other party received their notice letter but the green card (proving such receipt) can’t be found in the files.  This can be bad….  What should you do?  I recommend that when you get back the green cards, be sure to staple them to the copy of the notice letter that you put into your file.  This will keep those small, mint green and oddly shaped pieces of paper from walking away….

What My Clients Are Saying

“Chris is a competent, hardworking attorney.  Chris is always there when you need him and you don’t have to wait a day to get a returned phone call.  He does what he says he is going to do in a timely manner.  He has the expertise to make problems simpler which makes them easier to solve.  He is honest, consistent and reliable.  He loves what he does and is active in the community.”
David Ostrowe / Owner, O & M Restaurant Group, Inc. / Oklahoma City, Oklahoma

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Cannabis Considerations

Last Updated on Wednesday, 18 July 2018 11:48 Written by Chris Griswold Wednesday, 18 July 2018 11:48

Cannabis is the hot topic right now.  Lots of good folks are discussing its in’s and out’s.  I thought I’d mention a few things that affect my industry.  Good stuff for everyone.  See more below (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Cannabis Considerations

Question #1:  I’m thinking about buying a building that will be used to either grow, sell, manufacture or distribute Cannabis or its oil derivates – is there anything I should know?

Answer:  Well, it sounds like a great idea, and it’s legal now.  Just be aware that title insurance (a requirement of any lender) won’t be available.  Why?  While Oklahoma law permits the sale, etc… of Cannabis, Federal law doesn’t.  So, since title insurance “insures” the buyer that the building will work for that use, and the Fed’s could swoop in at any moment and enforce Federal laws against such use – title insurors bridle at insuring Cannabis uses.

Question #2:  I’m thinking about selling a center that includes one of my tenant’s spaces that grows/sells/manufactures/distributes Cannabis – is there anything I should know?

Answer:  Once again, the looming possibility of Federal enforcement presents the inability to get a title insurance policy in favor of your buyer.  A real fly in the ointment, so to speak.

Question #3:  Is there anything that I, as a possible, future seller of a center that would include a tenant that grows/sells/manufactures/distributes Cannabis – can do to prevent the trouble found above in Question #2?

AnswerYes.  When talking to a prospect Cannabis-user tenant, make their lease either month-to-month (subject to a 30 day termination provision, by either party), or for a short period of time.  That way, if a future sale does arise, the Cannabis lease can be terminated within the due diligence period of the purchase/sale contract, so that the inability of obtaining title insurance isn’t a deal-breaker.

Question #4:  Is there any way around the issues found above in Questions #2 & #3?

AnswerYes.  Pay cash for the property.  If you want an in-kind equivalent to title insurance, get an attorney to do a title opinion for you.  Kelly Miller at Professional Insurors (kmiller@pi-ins.com) and Paul Stuke at Stewart Abstract & Title (paul.stuke@stewart.com) both contributed to the content of this article, thank you gentlemen.

What My Clients Are Saying

“Chris is a competent, hardworking attorney.  Chris is always there when you need him and you don’t have to wait a day to get a returned phone call.  He does what he says he is going to do in a timely manner.  He has the expertise to make problems simpler which makes them easier to solve.  He is honest, consistent and reliable.  He loves what he does and is active in the community.”
David Ostrowe / Owner, O & M Restaurant Group, Inc. / Oklahoma City, Oklahoma

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Untangling Tenants From their Invitees and Licensees

Last Updated on Monday, 11 June 2018 09:15 Written by Chris Griswold Monday, 11 June 2018 09:15

Tenants in commercial leases are liable for a lot.  In some cases, they’re even liable for the acts, omissions and negligence of their invitees (customers) and licensees (sub-contractors, vendors, kiosk operators, christmas tree/pumpkin parking lot sales outfits, etc…) – but they don’t have to be if the lease is well written.  Good stuff.  See more below (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Untangling Tenants From their Invitees and Licensees

Question #1:  So what is the big deal for a Tenant to be liable for these groups?

Answer:  Well, ultimately, it’s a mark down on that Tenant’s profitability.  It’s an added cost of doing business, on top of taxes, rent, employee salaries and benefits, CAM, and the list is customarily long.  So, why add one more item to it?

Question #2:  How can a commercial tenant ensure that it’s not liable?

Answer:  The lease has to carve out a Tenant’s liability for these groups.  It’s one thing (and normal) for a Tenant to be liable for its own officers, directors and employees, but, it’s another for that Tenant to be liable for other extended persons which are not under the control or direction of Tenant – that extension/enlargement beyond the Tenant’s officers, directors and employees is what must be examined closely before a lease is finalized.

Question #3:  Is there anything more at risk in this situation?

AnswerYes.  If Tenant fails to eliminate this extension of liability, it will cost not only Tenant, but possibly the Tenant’s Landlord as well, unless the Landlord puts language into the same Lease that makes the General Liability coverage that Landlord carries subject to carve-outs that Landlord’s General Liability coverage shall all be secondary, non-primary, excess and non-contributory to Tenant’s coverage, as well as making Landlord’s coverage further subject to a Waiver of Subrogation clause in the Lease.

Question #4:  What should Landlord’s really do?

AnswerIn diametric opposition to the statements in Question/Answer #2 above (which are to Tenant’s favor), Landlord’s shouldn’t let a lease get written that allows Tenant to avoid liability for the acts, omissions and negligence of such Tenant’s invitees and licensees.  In other words, Landlord wants Tenant to be liable for these – or they become Landlord’s liability.  Remember, leases are the product of good negotiation and the parties need to know what points are really important to them, and then act accordingly.

Question #5:  Will Landlord or Tenant win?

Answer:  Unless the Tenant is a huge anchor in the center, Landlord will usually win (because Landlord’s insurance underwriter will require Tenant to be liable for its own licensees and invitees, at least in situations involving accidents occurring within the demised premises itself).

What My Clients Are Saying

 “Chris is a business-minded attorney who negotiates with the client’s goals in mind.  He is a knowledgeable and constructive participant in deal negotiations… loyal to his clients but practical in his approach.”
Bond Payne, Jr. / Vice Chairman of Corporate Development, Argent Financial Group / Oklahoma City, Oklahoma

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