Presenting a live 90-minute webinar with interactive Q&A Structuring Complex Easement Agreements in Commercial Real Estate Deals Negotiating Use Rights and Restrictions for Air Space, Mixed-Use Developments, Retail Complexes and More THURS DAY, MAY 1, 2014 1pm East ern | 12pm Cent ral | 11am Mount ain | 10am Pacific Today’s faculty features: David Van Atta, Partner, Hanna & Van Atta , Palo Alto, Calif. hareholder, Reinhart Boerner Van Deuren , Madison, Wis. Jesse S . Ishikawa, S The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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ST RUCT URI NG COMPL E X E ASE ME NT AGRE E ME NT S I N COMME RCI AL RE AL E ST AT E DE AL S Stra ffo rd Pub lic a tio ns Ma y 1, 2014 Da vid M. Va n Atta Ha nna & Va n Atta 525 Unive rsity Ave , Suite 600 Pa lo Alto , CA 94301 Pho ne : (650) 321-5700 dva na tta @ ha nva n.c o m http:/ / www.ha nva n.c o m Je sse S. Ishika wa Re inha rt Bo e rne r Va n De ure n s.c . 22 E a st Mifflin Stre e t, Suite 600 Ma diso n, WI 53703 Pho ne : (608) 229-2208 jishika wa @ re inha rtla w.c o m http:/ / www.re inha rtla w.c o m
I. Ove rvie w o f e a se me nt issue s in a hypo the tic a l c o mme rc ia l mixe d-use pro je c t . A. L isma n T o we rs (g e ne ra l de sc riptio n). 6
B. Ide ntific a tio n o f a ll o f the va rio us e a se me nts. C. Ma jo r b usine ss issue s: 1. Who a re the b e ne fic ia rie s (do mina nt pa rtie s) o f e a c h e a se me nt? 2. Whic h e a se me nts sho uld b e in g ro ss a nd whic h sho uld b e a ppurte na nt? 3. Co st a llo c a tio n fo r ma inte na nc e , re pa ir, re pla c e me nt. Po ssib ilitie s: a . Sq ua re fo o ta g e . b . Usa g e (e .g ., e le c tric ity, wa te r). c . F ixe d pe rc e nta g e (po ssib ly sub je c t to a djustme nt b a se d o n pe rio dic third-pa rty re vie w). 7
II . Ho w to do c ume nt the e a se me nts? E ithe r RE A o r c o mb ina tio n o f se pa ra te e a se me nts. A. Gra nting c la use 1. Co mmo n la w rule : Gra nto r a nd Gra nte e o f a n e a se me nt c a nno t b e the sa me pa rty. 8
2. Co nsid e r d ra fting the RE A to pro vid e tha t e a se me nts a ffe c ting e a c h po rtio n o f the pro pe rty a uto ma tic a lly spring into e xiste nc e upo n the c o nve ya nc e b y o rig ina l d e ve lo pe r o f suc h po rtio n to a no the r pa rty. 3. T o b e sa fe , d o wha te ve r the title insure r re q uire s to b e a b le to insure the e a se me nts a s pa rt o f the insure d pro pe rty. T he title insure r ma y re q uire the g ra nting c la use o f the d e e d to inc lud e la ng ua g e suc h a s, "to g e the r with, a nd sub je c t to , tho se e a se me nts se t fo rth in the RE A re c o rd e d a s d o c ume nt no . __________." B. De sc riptio n o f e a c h e a se me nt. 1. L e g a l d e sc riptio n pre pa re d b y surve yo r. 2. Re fe re nc e to a rc hite c tura l d ra wing s a tta c he d to the e a se me nt. 3. Ge ne ric d e sc riptio n (e .g ., with e a se me nt fo r e me rg e nc y e g re ss, re fe r to "a ll sta irwe lls a nd e xits lo c a te d in the b uild ing "). 9
C. Sta te me nt whe the r e a c h e a se me nt is a ppurte na nt o r in g ro ss. 1. E a se me nts to utility c o mpa nie s a re in g ro ss. 2. E a se me nts tha t b e ne fit spe c ific pro pe rtie s a re a ppurte na nt. D. Ro le o f a n o wne rs' a sso c ia tio n. 1. Ma na g e , ma inta in, re pa ir, re pla c e e a se me nt impro ve me nts. 2. Re so lve dispute s. 3. Asse ss c o sts to o wne rs. 4. E nfo rc e a sse ssme nts. E . F le xib ility. 1. Ame ndme nt pro c e dure s. 2. Rig ht o f se rvie nt o wne r to re lo c a te e a se me nt. 3. Pro vide fo r pe rio dic re vie w o f fo rmula e fo r a llo c a ting c o sts, b a se d o n a c tua l, histo ric a l use o f the e a se me nt. 10
II I . Spe c ific issue s a pplic a b le to a ll e a se me nts. A. Pe rmitte d use rs o f the e a se me nt: c o nside r c usto me rs, invite e s, a g e nts, c o ntra c to rs. B. L imit pe rso na l lia b ility o f a pa rty fo r b re a c h o f the e a se me nt a g re e me nt to a c ts/ o missio ns o c c urring during tha t pa rty's pe rio d o f o wne rship o f the b e ne fite d/ b urde ne d la nds, a s the c a se ma y b e . C. E xc lusivity vs. no ne xc lusivity. D. Rig hts re se rve d to se rvie nt la nd o wne r. At c o mmo n la w, the se rvie nt o wne r ma y ma ke a ny use o f the se rvie nt pro pe rty so lo ng a s it do e s no t ma te ria lly a nd a dve rse ly inte rfe re with the rig hts o f the do mina nt o wne r. E . Issue s a rising with e a se me nts in g ro ss: 1. Assig na b ility o f e a se me nt. 2. Cha ng e in use o f e a se me nt. 3. E xa mple : b e ne fic ia ry o f a 10-fo o t wide wa te r ma in e a se me nt g ra nts rig hts to a c a b le T V c o mpa ny to put its impro ve me nts within the e a se me nt. 11
F . Dura tio n o f e a se me nt. In ma ny jurisdic tio ns, a n e a se me nt is c o nstrue d to b e pe rpe tua l unle ss the e a se me nt do c ume nt sta te s o the rwise . G. Re lo c a tio n o f e a se me nt b y se rvie nt o wne r. 12
1. Co mmo n la w: no t a llo we d witho ut se rvie nt o wne r's c o nse nt. 2. Re sta te me nt (T hird) o f Pro pe rty (Se rvitude s) 4.8(3) sta te s: Unle ss e xpre ssly de nie d b y the te rms o f a n e a se me nt, a s de fine d in § 1.2, the o wne r o f the se rvie nt e sta te is e ntitle d to ma ke re a so na b le c ha ng e s in the lo c a tio n o r dime nsio ns o f a n e a se me nt, a t the se rvie nt o wne r’ s e xpe nse , to pe rmit no rma l use o r de ve lo pme nt o f the se rvie nt e sta te , b ut o nly if the c ha ng e s do no t (a ) sig nific a ntly le sse n the utility o f the e a se me nt, (b ) inc re a se the b urde ns o n the o wne r o f the e a se me nt in its use a nd e njo yme nt, o r (c ) frustra te the purpo se fo r whic h the e a se me nt wa s c re a te d. Se c tio n 4.8(3) ha s b e e n a do pte d b y o nly a ha ndful o f sta te s. 13
H. Ove rb urde ning the e a se me nt. 1. E xte nsio n o f the e a se me nt to b e ne fit a dditio na l la nds: g e ne ra lly this is c o nside re d o ve rb urde ning unle ss the rig ht to e xte nd ha s b e e n re se rve d in the e a se me nt do c ume nt. In the dia g ra m b e lo w, suppo se tha t L o t 2 o wne r g ra nte d the e a se me nt o ve r the sha de d a re a to L o t 1 o wne r, a nd tha t sub se q ue ntly, L o t 2 o wne r a c q uire s L o t 3. Do e s the b e ne fit o f the e a se me nt e xte nd to L o t 3? 14
2. Cha ng e in the de g re e o f use . E xa mple : ro a d se rving a pa sture (Pic ture A) e ve ntua lly b e c o me s a ma jo r a rte ria l se rving a 21-lo t c o mme rc ia l de ve lo pme nt (Pic ture B). Ge ne ra lly this is no t a llo we d unle ss the inc re a se in the b urde n wa s re a so na b ly fo re se e a b le a t the time o f e ntry into the e a se me nt do c ume nt. 15
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