To Record Or Not To Record

Last Updated on Thursday, 3 August 2017 01:59 Written by Chris Griswold Thursday, 3 August 2017 01:59

Listen up landlords and tenants.  There is a rhyme and a reason to recording (and not recording) leases in the land records of whatever relevant county.  This should be helpful for everyone… (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

To Record Or Not To Record

A question that comes up over and over again in my practice (from clients and opposing attorneys alike) is whether a lease document should be recorded in the relevant county’s real property records office (usually, the County Clerk’s Office).  Specifically, people ask “what difference does it make whether the lease document is recorded?”  Well, to answer this question, we must ask a couple more questions.

First, does the lease document contain sensitive information that you’d rather not be within the public domain?  Remember, if the lease document is recorded in the public records, the lease document and all the information within it will become public information.  So, for example, if the amount of rent you’re paying is set forth within the lease (and it usually always is stated within the four corners of the lease document) and you don’t want other industry competitors knowing how much you’re currently paying, or, more importantly, how much you will be paying in the future, then you might not want to record that lease.  Other factors to consider in arriving at whether you should or shouldn’t record would, among other things, be: i) any exclusive use provisions, ii) any required co-tenancy provisions, iii) any required minimum insurance policy limits, etc… which are expressly set forth within the lease.  Remember, if you don’t want someone else to know about all the terms of the deal that you’ve struck, then you probably don’t want to record the lease.

Second, is there another way (besides recording the actual lease document itself) to put the general public on notice as regarding the existence of the lease document?  Yes.  Parties to a lease usually agree to record what is called a “Memorandum of Lease” instead of the actual lease itself.  Why?  The Memorandum of Lease is a much shorter abstract of the lease document (usually only 1 or 2 pages) which still acts to put the public on notice as regarding the existence of the lease but doesn’t contain all of the sensitive information as set forth hereinabove.  So, with a Memorandum of Lease, you can still get the benefits that come with recording the lease document while retaining custody of the sensitive information contained within the lease document that you spent so much time negotiating over.

Accordingly, prior to recording any lease document, be sure to think through the questions set forth above.  More often than not, you’re better off not recording.

What My Clients Are Saying

Chris Griswold has always been proactive and professional.  He takes the time to work with us and tailors his approach to our situational needs.  My favorite thing about Chris is that he will let me know if there is an easier, less-expensive approach.  We look forward to working with him well into the future.”
Carl S. Milam / President / Western Concepts Restaurant Group / Oklahoma City, Oklahoma

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Lot Lines: Disaster lessons for property owners

Last Updated on Thursday, 6 October 2016 02:05 Written by Chris Griswold Monday, 20 June 2016 02:49

Courtesy the Journal Record
by Ted Streuli

There were two tragic incidents in Orlando, Florida, this week: the mass shooting at a nightclub that left 50 people dead and a 2-year-old killed by an alligator on Disney property.

I asked Oklahoma City attorney Chris Griswold what commercial property owners and managers can do to limit their liability in such extraordinary circumstances.

The property owner might not have liability in the nightclub shooting, but it’s something an owner would like to prevent. Oklahoma allows licensees to carry firearms, but Griswold said that can be prohibited by a commercial landlord. The owner or his agent must post a sign saying guns are not allowed on the property, and it then applies to any part of the privately owned building that’s open to the public. That means if it’s posted, no one except law enforcement officers can carry a gun into reception areas, elevators, hallways, dining spaces or other public places.

There are exceptions, Griswold explained. Landlords can’t prohibit gun owners from locking their weapons in their cars parked on the property, and they can’t prohibit a tenant whose office is not open to the public from carrying a gun if he can enter without passing through a public space.

For multifamily housing, there would have to be a stipulation in the lease.

Carrying a gun into a privately owned building that prohibits firearms is not a criminal act. The landlord may order the person off the premises; if he doesn’t comply and the police are called, he can be fined $250. The penalty isn’t stiff, but landlords and their property managers who have posted the appropriate sign have the right to remove people who are armed.

As for the alligator incident, Disney’s lawyers have likely been hunkered down, frantically looking for a way to minimize the company’s liability. As Griswold noted, the whole point of Disney is to entertain families with children, and the company has a responsibility to do so in a safe manner.

The family assumed no risk of a gator attack, and they may argue that no reasonable person would expect an alligator to come after a child on theme park property. Disney could have marked the dangerous area or hired a company to remove the alligators. At the very least, they could have posted warning signs.

Having warned the public that a danger exists, said Griswold, can help mitigate the liability when something goes wrong.

Read more:

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Tenancy At Will vs. Tenancy At Sufferance

Last Updated on Tuesday, 13 October 2015 06:14 Written by Chris Griswold Tuesday, 13 October 2015 06:14

The purpose of this article is to solely address the attributes of a tenancy at will vs. a tenancy at sufferance arrangement within the context of what happens at the natural expiration of a written commercial lease agreement when a tenant remains on the leased premises.

Simply put, if there’s a written lease and the lease expires naturally, by its own terms, whether a tenancy is at will or at sufferance depends upon one simple thing:  the consent (or lack thereof) of the landlord for the tenant to remain in possession.

If the landlord authorizes the tenant to remain in possession, the tenancy is at will (and becomes a periodic tenancy as soon as the tenant begins paying rent regularly).  If the landlord doesn’t authorize tenant’s continued possession, the tenancy is at sufferance.

What’s one reason for us to have the legal fiction of the tenancy at sufferance and what are its attributes?  Without it, the statute of limitations on adverse possession would begin running upon the natural expiration of the written lease and, upon the expiration of such required statutory period (15 years for Oklahoma, and 10 years for Texas), the hold over tenant could have arguably acquired fee simple title to such leased premises by bringing suit and demanding title to same by its simple adverse possession of the leased premises for the required time period above – something a landlord can easily prevent by declaring (in the written lease) that such holdover tenant’s possession of the leased premises after the natural expiry of the written lease to be one of a tenancy at sufferance.  The payment of rent by tenant (and the acceptance thereof by landlord) during the tenancy at sufferance can raise arguments by either party as to whether there is a true tenancy at sufferance arrangement, since the acceptance of rent by landlord could be argued to be landlord’s tacit consent to tenant’s occupancy – subject to the written terms and provisions of the lease (which could squarely address these issues).

What are the attributes of a tenancy at will and what are its strengths?  An arrangement, usually unwritten, whereby the landowner permits the tenant to be on the property with no advance understanding as to the termination date or the amount of the payment of rent.  This arrangement can, in the real world, also briefly follow the natural expiration of a written lease for a very brief time – until the tenant begins paying rent regularly (which is when a periodic tenancy is created and the tenancy at will terminates).  A tenancy at will arrangement, even after being converted to a periodic/month-to-month tenancy arrangement by the regular payment of rent, can be conveniently terminated by either the landlord or tenant by giving advance notice to the other party of such party’s intent to terminate the leasehold (usually 30 days ahead of the desired termination date, depending on the circumstances), unless the lease says otherwise.  Accordingly, while not required, the lease could provide that tenant can remain after the natural expiration date provided the tenant pays rent at some higher stated rate (usually 150% to 200% of the previous rate), not to exceed some stated period of time – thereby allowing the tenant some time flexibility for moving out while also guarantying the landlord a stated amount of rent (while the current tenant remains in possession) while a new, replacement tenant is being secured.

The information presented within this article is of a general nature and is not intended to be relied upon as legal advice in any particular matter without first consulting qualified counsel.

What My Clients Are Saying

“Just a note to let you know how much I have appreciated your help in the past with lease preparation and certain lease particulars that the lay person may sometimes not be familiar with. You have demonstrated a good balance of getting past certain points of law that when considering the lease in its entirety, have a tendency to slow the deal process. As I continue to do more business with larger companies, especially public companies, your knowledge of what is relevant and what is not is of great benefit. I also value you not interjecting yourself in the business points of a transaction except when appropriate. I trust that we will be doing business together for many years to come.”
Mark Ruffin, Precor/Ruffin / Oklahoma City, Oklahoma

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