MacDermid, Reynolds & Glissman, P.C.

                                                                By: Robert A. Firger, Esq. 
                                                     MacDermid, Reynolds & Glissman, P.C.

“Sustainability,” “energy innovation,” “infrastructure upgrading.” These are the watchwords of today’s new future-oriented environment, from the worlds of politics and business schools, to industry, finance, venture capital and real estate investment. Like many “new” and “suddenly popular” trends, these have all been a long time in the making of their overnight prominence. My wife’s uncle, a professional forester, visited recently and after showing him our home heating wood pellet furnace, he reminded us that he had started a small company which pioneered the use of wood pellets thirty years ago, but failed in the attempt. Last month, I met a gentleman recently retired from the fuel cell division of United Technologies. While he is proud today to see his work adopted in city buses, truck fleets and soon in consumer autos, he spent almost his entire forty-five year career perfecting that technology.

Similarly, the U.S. Green Building Council, formed in 1993, quickly adopted their first version of the LEED (Leadership in Energy and Environmental Design) standards for environmentally sound sustainable building design and construction. In recent years, LEED design standards and their now familiar “LEED Certified” and “LEED Silver, Gold and Platinum” designations have crept into the general consciousness and vocabulary. But the actual adoption and promulgation of these standards for building construction and renovation in everyday commerce has taken almost the entire sixteen years to date. The occasional high profile story of a wealthy and/or socially conscious property owner has appeared from time to time. Harvard University, M.I.T., some large financial and insurance companies and some smaller, but well endowed private building owners have committed to the financial and administrative costs of such projects over recent years.

However, with today’s changed political priorities, increased global environmental awareness and the need for innovative and radical shifts in industrial and employment priorities in the U.S., interest in LEED has accelerated. By early 2009, Federal incentives included at least seventeen tax, loan and grant programs. Every U.S. state has adopted mandates, legislative requirements or preferential treatment for LEED or other environmental projects, including 298 tax incentive qualifications, 121 loan and bond programs and 290 rebate programs. Many municipal and corporate facilities departments and executive planners now specify space requirements that in return for their higher construction costs and lease payments, can improve the efficiency and cost savings of their occupancies, as well as the comfort, satisfaction and productive capacity of their employees.

The attainment of LEED certification requirements, now in its Version 3, involves extensive compliance with a virtually parallel building code in six areas: Sustainable Sites; Water Efficiency; Energy and Atmosphere; Materials and Resources; Indoor Environmental Quality; and a category allowing for new concepts and approaches to the Innovation and Design Process. A Project Administrator, working with design and construction professionals, files a design plan matrix with the USGBC. From improvements to Water Efficiencies such as water efficient landscaping and innovative wastewater technologies; changes to the Energy and Atmosphere of the building such as use of renewable energy and elimination of ozone depleting refrigerants; and standards for Indoor Environmental Quality including increased ventilation and improvements to thermal comfort and lighting, the design plan sets out which proposed credits specified in the USGBC guides the intended LEED certified building project expects to attain. The USGBC will notify the Project Administrator which credits will likely be awarded, if the filed plans are completed satisfactorily.

Following construction other credits may be awarded, among others, for use of recycled materials, effective construction waste management, attaining specified levels of building commissioning or use of low emitting paints and carpeting materials. Working with a LEED AP (Accredited Professional) can greatly expedite this process, as well as providing one optional Innovation and Design credit toward the minimum 26 credits to be certified, or to assist in obtaining the minimum of 33 credits for silver, 39 for gold or 52 credits for platinum levels. A LEED AP attorney can also assist owners, tenants, lenders, design and construction professionals and associated title, survey and environmental specialists in resolving LEED issues.

LEED certification is the mark of future oriented real estate, which can provide significant financial and tax benefits to your building plans, including eligibility for tax credits, loans, rebates and other incentives. Environmentally sound and cost effective building operations are more attractive to tenants, employees and owners, which can result in higher satisfaction, marketability and potential profits. If you have not investigated using its power to contribute to your next project, you are missing out on a significant opportunity for your real estate needs, your clients and the future of our built environment.

This article is for general interest and education only and does not constitute legal advice.

Robert A. Firger, LEED AP, is a member of the Real Estate Practice Group of MacDermid, Reynolds & Glissman, PC. He advises and assists in LEED project planning and certification and works with owners, tenants, design, construction and finance professionals to interpret and resolve issues in the LEED process as well as in commercial real estate transactions.

                                                                    By: Michael G. Albano, Esq.
                                                           MacDermid, Reynolds & Glissman, P.C.

Those of us who have been around the block a few times have seen recessions come and go. But this may be the first time that you (or a client) have experienced an economic downturn that has brought you to your knees. Despite your best efforts to keep your business afloat, you continue to fall behind on your mortgage payments, and the bank’s patience has not just worn thin – it’s worn through. The bank has initiated a foreclosure action. The clock is ticking. What do you do next? After you’ve passed along the foreclosure complaint to your attorney, there are a few options you may want to consider in consultation with your attorney, if you haven’t already done so. First, have you exhausted all your options with the bank? If you can show the bank that better times are around the corner (for example, you just entered into a potentially profitable relationship with a major distributor), the bank might be willing to enter into a forbearance agreement that would stave off foreclosure (and possibly the need to make payments) while you get your business back on its feet. Second, would the bank be willing to refinance at a lower rate of interest or for a longer term so that monthly payments fall within your diminished means? Perhaps you have an asset that you can sell to reduce the principal at the time of a refinancing. Or, you could retain ownership of the asset, but use it as additional collateral in a refinancing.

If you don’t see business improving in the foreseeable future, or if the bank’s not interested in forbearing or refinancing, another option might be for you to offer the bank the deed to the property in lieu of foreclosure. This option is especially suited to business owners who have little or no equity in the property and few other assets. This can be an attractive alternative to a bank that wants to avoid the foreclosure process and realizes that it will have little chance of collecting on a deficiency judgment if the appraised value of the property is less than the underlying debt. Similarly, the bank might give its blessing to your short sale of the property (that is, a sale for less than the amount remaining on the mortgage). Whether the bank is amenable to either a short sale or a deed in lieu, you will want your lawyer to secure a written release from the bank for any resulting deficiency. Such a release is an attainable goal considering the realities of the marketplace and your limited, or non-existent, assets.

If the bank is unwilling to forbear, even if you can demonstrate that your and/or your business’s finances will improve dramatically in the next six to twelve months, you will be forced to address the foreclosure complaint – and quickly, as there is often less time to answer a foreclosure complaint than other civil complaints. (In Connecticut, for example, foreclosure defendants have just fifteen days to file an answer, whereas defendants in other civil actions have thirty days.)

If you are unwilling to surrender without a fight, and there’s a sound legal basis for doing so, there are a number of pleading alternatives available. Generally, these pleading alternatives follow a prescribed order, so that employment of the second alternative will waive the right to go back and make use of the first alternative. First, there may be a defect in how you were served with the summons and foreclosure complaint, which could result in a lack of the court’s personal jurisdiction over you. If your attorney suspects this might be the case, he or she will want to file an appropriate motion immediately. Another alternative might be to file a request to revise the foreclosure complaint due to a lack of clarity or other defect in the pleadings that needs correcting. Yet another alternative might be a motion to strike (or dismiss, depending on the state) one or more of the claims made in the foreclosure complaint due to the bank’s failure plead the essential elements of a foreclosure claim or, for example, because the bank failed to name an indispensable or necessary party to the lawsuit – such as an unnamed subtenant – whose rights might be adversely affected if they were not considered in any judgment that might result.

If none of the foregoing alternatives are viable, or if they succeed in only slowing down the foreclosure (which, depending on the circumstances, may be a goal in itself), you may have to answer the complaint. But alternatives exist there, as well. You might succeed in foiling the foreclosure if you can assert a special defense in the answer that calls to light a defect in the making, validity, or enforcement of the note or mortgage at issue. Typical special defenses include the relevant statute of limitations and the invalidity of the lien. For example, a defective assignment might prevent the assignee from proving that it actually owns the note and mortgage, which would result in a lack of standing to bring the foreclosure. Furthermore, because foreclosure is an equitable proceeding, other defenses available to you might include fraud, mistake, unfair trade practice, and even the bank’s refusal to agree to a favorable sale of the property to a third party.

Of course, you may reach the conclusion, perhaps in consultation with your attorney, that you lack a viable alternative or defense, and time is right to walk away without a fight. You should be aware that there may be serious tax consequences requiring consultation with a tax advisor if the bank agrees to a deed in lieu, a short sale, or any other resolution that results in the forgiveness of any portion of the loan. Regardless of what you ultimately decide, it’s advisable for you to prepare a game plan with your attorney, broker, and other professionals that will protect your financial interests now and on the other side of the current recession.

This article is for general interest and education only and does not constitute legal advice. The reader is encouraged to seek legal counsel before utilizing any suggestions contained in this article.

(Part #2: From the Landlord's Perspective)
By: David R. Glissman, Esq.
     MacDermid, Reynolds & Glissman, P.C.    

1. Review Your File. Pull the lease file out. What do you have to work with? Lease, guaranty, security deposit, duty to replenish security deposit, defaults to raise the heat? Consider a credit report and an asset search. Check the file for tenant complaints and other potential defenses and evaluate their viability. The threshold question is do they have sufficient asset strength to enforce the existing lease terms? The second question is, do they have defenses against enforcement? Consider eviction time and impact on your cash flow vs a workout with them and continued cash flow. Are they threatening bankruptcy? Evaluate impact of same.

2. Do You Have Other Options. Do other tenants need to expand? Are other parties interested in the space? Do you really want to work with this tenant to try and make it happen?

3. Make the Tenant Do Its Homework. If the tenant is asking for concessions, you may want to demand certified financial reports from the tenant to see for yourself how bad it is. Are there other assets available to cover their obligations? Do the principals have assets? Let the tenant convince you that there are no other assets but that the concessions it is asking for will save the day. You must determine that with your assistance they can in fact survive, and that there really are no other assets to cover their obligations.

4. Just Say No. If the tenant is financially strong or you have other viable options for the space, the tenant is probably out of luck. There is no incentive to a landlord with an equal or better alternative other than the hassle of litigation and then putting new tenants in.

5. Agree to Rent Reduction. A simple lease modification reducing the rent, reducing the space, drawing down the security deposit, reducing the term, etc. This is a simple, permanent fix. Consider limiting it to the named tenant. Consider other lease enhancements in exchange for this concession.

6. Change the Term. Reduce the rent but extend the term or agree to reduce the term and start looking for new tenants.

7. Reduce Rent Now, Increase Rent Later. Reduce the rent now in exchange for an increased rent later. Tack interest on. Extend the term as well. With interest, it is just a time value of money issue.

8. Abate Some Portion of the Rent for a Stated Period. Allow the differential between the reduced rent and the stated rent to accrue for a period of time and make it due and payable on a date certain. Extract a personal guaranty and other collateral for the accrued and unpaid rent. Tack on interest to mitigate the time value of money. Consider financial reporting covenants and trigger a recapture or abatement termination if the business improves or some other relevant event occurs. Consider adding a right to take-back the space following notice and start marketing.

9. Rewrite the Lease. Rental concessions in exchange for a tighter lease. Take back all those lease concessions you made when you really wanted them and they had other choices. Financial reporting; guaranties; security deposit; elimination of termination, expansion, contraction, renewal options. Go back to that first draft of the lease you liked so much and see what you gave up.

10. Collateralize or Improve the Credit Behind the Lease. Demand a full or limited guaranty if none is in place. Eliminate the cap or concessions you made in the old guaranty. Consider credit enhancements such as a larger deposit either in cash or by letter of credit (perhaps built up over time or burning down over time).

11. Equity Kicker. If the business stabilizes because of your assistance, perhaps you should share in the profits up to some amount for some period of time.

12. Reduced Rate Sublet or Assignment. Encourage the tenant to assign the lease or sublet a portion of the space at a reduced rate thus allowing the tenant to pick up only a portion of the rent while the sublessee or assignee picks up the rest. But, don’t agree to non-disturbance with the new occupant.

13. Consider a Stipulated Judgment. Consider putting the lease into eviction, then settle on terms and incorporate those terms into a judgment of eviction which is stayed and ultimately dismissed if they live up to their bargain. This will permit a quick resolution if they default again shortly after the deal is cut.

14. Your Lender. Don’t forget your lender and the covenants in your loan documents prohibiting lease modifications and terminations without lender approval.

The above solutions are all that space will allow. There is no limit to creative win win solutions.

By: David R. Glissman, Esq.
  MacDermid, Reynolds & Glissman, P.C.

Tenants are beginning to feel the pain of business contraction and looking for solutions. The space they don’t need and the rents they cannot afford to pay may hinder their continued viability. What services can brokers offer and what services should tenants and landlords ask of their brokers in this environment? This article offers an approach to utilizing the brokers immense market knowledge to find solutions to the dilemma, first from the tenant’s perspective and then from the owner’s perspective. Consider the following:

Tenants are coming to their landlords seeking rent, space and term relief. Landlords want nothing to do with it given their own problems with loans coming due, rents shrinking and cap rates rising. But, each of these players needs the other and therein lies the crack in the door. When confronted with a tenant’s request, the landlord asks itself the following fundamental business questions. Does the tenant and/or its guarantors have sufficient assets to support enforcement of the lease with out the need for modification? Does tenant have valid defenses to enforcement? How long will it take to evict tenant and collect or enforce the payment obligations under the lease and at what cost? Assuming there are no meaningful assets to collect from the tenant, how long will it take to lease up the space, at what rate and term, with what concessions and to what type of credit? Finally, what is the net present value of a lease enforcement/relet solution vs a lease modification with concessions? It is in answering some of these questions that the broker brings value, representation and advocacy to its client-------at true economic and compensable service value.

FROM THE TENANT’S PERSPECTIVE

1. Help TheTenant Get Organized. The landlord has no interest in a sob story. It wants hard facts and the smart tenant does its homework before sitting down with its landlord. The tenant should answer all of the above questions before its first words are uttered. As an initial step, tenant and its lawyer need to review the lease file and understand tenant’s obligations, eviction defenses, negotiating leverage, eviction and collection timing, litigation costs and asset exposure.

2. Advise The Tenant About The Market. What are the market rents, terms and concessions applicable to this space? If the landlord takes this space back, how long will it take to lease it up, what will the cost in doing that be, and what economic benefit will the landlord obtain from that new deal? Net present value it back to today. What is that deal worth to the landlord in today’s dollars?

3. Develop the Concession Strategy. Refer to New England Real Estate Journal Volume 48, Issue 1, January 2-8, 2009 for an article on a number of concession strategies to consider. The essence of a broker’s service at this stage is to look at each concession strategy and apply the “can landlord do better than this in the market” test. The analysis must be backed up with hard, independently verifiable, market facts. If landlord can do better by saying no to the proposal, then the conversation is going to be short. Some concessions to consider include rent abatement or reduction, rent accrual, term reduction, lease termination perhaps with buyout, rent reduction followed by increase later to recoup the loss, improving the lease, improving the collateral behind the lease or behind the rent accrual, equity piece to landlord, draw on security deposit with later replenishment, and others.

4. Consider A Below Market Rate Assignment. What rental terms make this space immediately marketable and attractive? A broker can provide advice on that threshold and define its elements. Under this scenario, broker locates a new tenant at an attractive below market rate (such as an adjoining or nearby user). Tenant assigns the lease to new tenant. Ideally, new tenant assumes the lease as is or with some negotiated rental reduction between landlord and tenant. Then, old tenant executes an agreement behind the scene directly with new tenant pursuant to which old tenant agrees to pay new tenant $X per month as a rent subsidy. Alternatively, old tenant enters into the same agreement with landlord and pays it directly to landlord and the assigned lease is modified to a reduced rent reflective of the attractive rate. Old tenant ideally is off the hook for the assigned lease, and locked into the rental subsidy amount payable either to the new tenant or directly to the landlord. There are a variety of variations to this approach, many landlord objections, and a good leasing lawyer can provide solutions as the negotiation unfolds.

5. Advocate for the Tenant. Finally, during the early stages of negotiations, before the heat rises and swords are drawn, what better person is there to advocate for the tenant than a deal making broker armed with a well thought out plan backed up by solid market data.

FROM THE LANDLORD’S PERSPECTIVE

1. Help Owner Get Organized. Owner, like tenant, needs to do its homework. Help owner obtain an asset search and credit report on the tenant and its guarantors; get owner’s attorney to review the lease, guaranty and credit enhancements, and correspondence file; assist owner in locating eviction counsel to advise on viability of eviction, timing, cost and potential defenses. Help owner to set up a checklist and framework for analyzing the viability of enforcing the lease “as is” or negotiating a rent concession and documenting it.

2. Provide landlord with a reality check on market rate tenant availability for that product and marketing time. An owner has to decide what its next best option is. How long will it take to evict the tenant? How long will it take to market and lease up the space and at what rate? Will there be TI, free rent and other concessions required? Owners must know the answer to these questions before they can respond to a tenant’s request because at the end of the day, the owner must decide which path provides the better return. Say no and fight or take a hit. A broker can provide the owner with the solid fact based market data it needs to make this decision; information that has great economic value to an owner confronted with these questions. Just framing the analysis for the owner may be of tremendous service. Fill in the blanks for the owner, and the broker is a hero. Moreover, under Connecticut law, once an owner serves the notice to quit and starts the eviction, it has a duty to mitigate damages and needs to be going to market asap and documenting a reasonable marketing program. This will require that owner list the property right away and commence marketing.

3. Provide landlord with current rent data for market comparison. A tenant will say “the best you can do if you go to market is X, and therefore, you are better off working with me at that number or less” and the landlord needs to determine whether that statement is accurate. Working with that tenant on a modification may make sense, and the broker can represent the landlord in those negotiations using market knowledge and an understanding of the tenant’s options. “Tenant, we can lease this all day long at X. You are going to have to do better than that before this conversation is going to go anywhere.”

4. Provide landlord with a reality check on below market rate tenant availability. When a tenant is in trouble, they may need to reduce their space or walk from it. A landlord faced with a termination request and perhaps a pennies on the dollar buy out offer, may prefer to facilitate a below market sublet or assignment in cooperation with the tenant. This approach is potentially a win win. New user gets a below market rate; departing tenant subsidizes the below market rent bringing it up to the contract or a negotiated rate at a substantial savings to tenant while spreading the cost of that solution over the balance of the term; and landlord keeps the rent stream going at the bargained for rate while expanding the credit on the lease from one troubled tenant to two joint and severally liable credits. A broker has the capacity to put this deal together and can tip the owner off to the viability of this solution.

5. Owners should be reminded that there are other enhancements they can consider in exchange for a rent or space concession. Extend the term; reduce rent now and raise it later to recoup the loss; rewrite the lease to pick up the concessions you made when you put the deal together; collateralize or improve the credit behind the lease; take an equity piece in the tenant; draw the security deposit down and require a phased in replenishment of it; to name a few.

A good broker knows the market, the current rates and concessions and who out there is moving, growing and shrinking. A good broker can take their immense market knowledge and plug it into an analysis matrix that will be invaluable to both parties in finding their way to a solution to a real economic problem. The broker has the skill sets that owners and tenants need to meet the issues confronting them in this market; and that has all the makings of opportunity for everyone involved.


Contract Contingencies: Your Life Jacket When The Deal Gets Stormy 8 Easy Tips to Make Them Work on Your Next Deal 
                                                               By: David R. Glissman, Esq. 
                                                      MacDermid, Reynolds & Glissman, P.C.

A contract contingency is a section which allows a party to the contract to terminate the contract (and hopefully get their deposit back) if some issue is not resolved adequately. And therein lies the secret to success or failure------what “issue” and “what resolution.” If drafted well, both sides are happy. If drafted poorly, one or both sides have a mess on their hands.

1. Make the Basis for Termination Broad or Narrow-Make sure the basis for termination addresses your needs. Buyer says it wants to get out for any reason. Seller says it had better be a big problem. The leverage of each will define the scope. There are many methods to limit scope or broaden it to meet the relative needs of the parties. Defining acceptable reasons for termination, however, can take a long time and that device is usually only used in a situation where the Seller has tremendous sales leverage. Sellers will often trade a broad scope (i.e. easy termination right) for limited representations and strong “as is” language.

2. Provide Enough Time-Phase I’s, permit checking, title work and building/system inspections can usually be done in a couple of weeks. Phase II’s, land survey’s, information evaluation and problem resolution take much longer. Make sure that the agreement gives adequate time to get the work done. Sellers will often grant extensions for survey and Phase II, but only after all other items are waived. Sellers might even try to limit the basis for termination during the extension phase to more serious survey and environmental issues.

3. Permit but Control Access-Establish the ground rules for site access and talking with the town, employees, consultants, tenants and lenders. Address insurance, indemnities and confidentiality. Sellers will often want to control the flow of information, and Buyers will want to be able to do whatever they want with whatever they learn.

4. Obligate the Seller to Cooperate (or limit the duty)-and define what cooperation you will need or give and when. For example, Sellers will have to consent to recertification of surveys and environmental reports. They will probably have to open the door to the tenants. Property managers will need their seller’s consent to speak. The Seller, on the other hand, may want to limit who the buyer talks to and to be present during those communications. Seller may want releases and waivers before any of its team is contacted.

5. Cover the Tenant Issues-Deal with SNDA’s and Estoppels. Who gets them, what do they say and what happens if they are not obtained. A Seller who agrees to deliver estoppels and SNDA’s or be in default is in for a rude awakening when the first tenant contacted rewrites the form or refuses to return the call. Address each party’s remedy for failure to obtain. The access agreement should make sure that the Buyer does not interfere with the Tenant’s operations, or cause Seller to be in breach of the lease.

6. Satisfy the Lender- Find out what the new lender is going to need, and then make sure your contract allows you to get it. In addition to SNDA’s and estoppels, they require certain survey certifications and may not approve certain title companies, may require copies of certificates of occupancy and land use compliance opinions.

7. Permit and Control Environmental Examinations- There are non-intrusive Phase I’s, and Phase II’s that look like swiss cheese. Buyers want the right to poke holes everywhere and tell anyone the results. Sellers want to limit the scope and control the release of information. In addition, Sellers may want to control environmental information even after the sale occurs if there are particularly sensitive environmental issues at the property. Moreover, if the Buyer discovers a big problem, Buyer may have a duty to report it and Seller may want to bargain for the right to be the one to report it first.

8. Obtain Indemnities- Sellers usually insist that the Buyer have insurance in place before entering the property, and then require Buyer to indemnify the Seller from and against any problems resulting from that entry. Buyers will usually agree, but may try to limit recourse to the insurance and also will seek to carve out exposure for any pre-existing environmental problems.


Rental Reduction Solutions For Cash Strapped Tenants (Part #1: From the Tenant’s Perspective)
                                                             By: David R. Glissman, Esq.
                                                   MacDermid, Reynolds & Glissman, P.C.

Are you or your clients being hammered by the financial crisis? Has business contracted? Do you need to downsize your space or reduce your overhead? One option to consider is reducing your space or restructuring your rental obligation. It is not an easy fix, but if you do your homework and have enough options to work with, it is possible. Consider the following:

1.First, Do Your Homework. Review your lease. You are looking for rights, outs, landlord defaults, anything. This is all about seeing what leverage you have to work with. Experience teaches that a slow read of a complex lease may produce a powerhouse list of options. Consider what the market conditions are surrounding your space and how that might impact the negotiation? Is this an easy assignment or sublet situation? If you go under, will the landlord have dead space for a long time to come? Do you have a guaranty sitting out there? Does your company have significant assets at risk?

2.Hard Ball. If recourse under the lease is to minimal assets, the conversation is short and simple. We are walking or going under if you don’t give us this concession—NOW. This solution, however, does not fit most situations. There are other more landlord attractive solutions.

3. Straight Reduction Using Reality Therapy. Landlord, we are in trouble. Here are our books. No hiding here. Give us a reduction with no hooks and we are likely to live on and be a great tenant. Refuse and we are likely to not be around this time next year. Your choice.

4. Extend the Term Now. Landlords are looking for long term stabilized rental streams. Offer it now. Extension for a rent reduction. Show the landlord how this will stabilize your business situation for the long term. Consider offering a covenant providing landlord with future financial information on the company. This makes lenders happy.

5. Reduce Rent Now, Increase Rent Later. Reduce the rental now in exchange for an increased rental rate later, perhaps with an interest accrual component baked into the new increased rent. The rental bump later will put landlord in the same position as the level rent previously agreed to. This becomes a time value of money issue for the landlord rather than an economic issue, and the timing is mitigated by including interest on the accrual.

6. Accrue Reduction Differential, Balloon it with a Personal Guaranty. Allow the differential between the reduced rent and the stated rent to accrue for a period of time and make it due and payable on a date certain. Offer up a personal guaranty for the accrued and unpaid rent. You can sweeten this offer with collateral to back the personal guaranty and it can be documented with a promissory note from the tenant, a guaranty with some credit behind it, and perhaps a collateral package. You can add interest accrual to mitigate the time value of money concern. Try burning some or all of the accrual off if you keep up your payments.

7. Offer to Improve the Lease. You had the leverage when you negotiated that lease. Your hot shot attorney extracted all kinds of concessions. Go back to those negotiation notes (the landlord has forgotten about them now) and see what you extracted. Put some of those back on the table.

8. Collateralize or Improve the Credit Behind the Lease. Step up to a full or limited guaranty. Start with a guaranty of collection (collects only if tenant does not pay after suit) and back into a full guaranty (can sue either of you). Consider credit enhancements such as a larger deposit either in cash or by letter of credit, but try to burn all of this down over time if you perform or consider an automatic release of the guaranty if you bump the rent stream back up.

9. Assign or Sublet. A clean exit is the best out. If you have to consider supplementing the assignment or sublet rental, it is still cheaper that eating the entire rent. Regardless of how the lease language is phrased, there is a fair amount of case law on the subject of withholding approval to provide guidance on the viability of this option.

10. Buy Out the Lease. Offer to pay the landlord a one time fee to terminate the lease. Pay it in cash if you can or offer to sign a note, collateralize the note, and pay it back over time or in a balloon down the road.

11. Become Educated on Your Legal Options. Get your attorney to explain the eviction procedures in your jurisdiction. Eviction can take time and may allow you to raise defenses. You can fight and then perhaps settle at a later date. In some cases, landlords may have a duty to mitigate their damages (i.e. try to find a new tenant for you). The lease review may reveal defenses to either the lease or the guaranty.