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Back to Basics: A Rundown of Tennessee’s Eviction Process

Recently, I’ve had a flood of questions from clients asking how to evict problem tenants. This post describes how to evict a tenant or other occupant of commercial real estate. The first step in dealing with an eviction is determining whether there is an agreement in place that governs occupancy of the property.  Typically, the lease or other agreement between the parties will outline any notice that may be required and other conditions precedent that must be satisfied prior to exercising remedies. Fortunately, in addition to the applicable provisions of a lease, if any, the Tennessee Legislature has provided us with a statutory scheme “to provide a streamlined summary procedure to determine the rights to possession of land.” 94th Aero Squadron of Memphis, Inc. v. Memphis-Shelby County Airport Auth., 169 S.W.3d 627, 637 (Tenn. Ct. App. 2004); see Tenn. Code. Ann. §§ 29-18-101 through 29-18-.134.  To begin eviction proceedings, one […]

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Lien Priority – How to Make Sure You Are Watching Out For Number 1

  The Tennessee Court of Appeals recently decided a classic case involving lien priority and whether an individual or entity not holding title can create a valid security interest in real property.  Anchor Pipe Co., Inc. v. Sweeney-Bronze Dev., LLC, No. M2011-02248-COA-R3-CV (Tenn. Ct. App. Aug. 2, 2012). The issues involved in the case arose during the development of a residential subdivision located in Gallatin, Tennessee.  In February 2007, the owner engaged Anchor Pipe Company (“Anchor”) to promptly commence work on the property.  As of May 2007, record fee simple title to the property was held by Sweeney-Bronze Development, LLC (“SBD”).  On July 24, 2007, the construction lender recorded a Deed of Trust from Sweeney-Bronze Holdings (“SB Holdings”), not SBD.  On June 27, 2008, Anchor was told that it was not going to get paid for any more work on the property.  During July 2008. Anchor recorded two materialmen’s liens against the property.  On November 12, 2008, a deed […]

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Baseball Arbitration to Settle Valuation Disputes – Don’t Get Caught in Left Field

It is not uncommon for commercial real estate lease agreements to contain an option to extend the original lease term.  Most of the time, the lease will include language that confirms that all terms and conditions of the lease remain the same during the extension term, except for the rent amount, which shall be adjusted to reflect the “Market Rent” based on a pre-determined formula described in the lease.  Many leases provide that a landlord will submit a value for “Market Rent” to the tenant within some period of time prior to the expiration of the lease term, and the tenant has the right to either accept or reject the value.  If the Tenant rejects the value, a well-drafted lease will describe the exact process the parties will use to determine Market Rent during the renewal term. Traditionally, landlords and tenants resolved valuation disputes by using two or more “independent” […]

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Future Rights in Real Property, Part II: Practice Pointers

In Part 1 of my series on future rights, I described the 4 primary future rights with respect to commercial real estate as follows: (i) Option; (ii) Right of First Refusal; (iii) Right of First Negotiation; and (iv) Right of First Opportunity.  Anytime, my clients indicate an interest to either grant or receive a future right, I always try to critically discuss the following issues: First, are there competing interests for the relevant real property that makes up the subject matter of the future right?  In other words, the grantor of such a right should make sure that it has not given the same right or conflicting rights to multiple beneficiaries.  For example, in the case of office space, one tenant may be entitled to an expansion option to certain space while another tenant may possess a right of first refusal that is pre-conditioned upon the first tenant not exercising […]

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Future Rights in Real Property, Part I: Options, Right of First Refusal, Right of First Negotiation, and Right of First Offer

Whether as part of a lease or purchase and sale transaction or otherwise, real estate professionals often negotiate future rights with respect to real property. Sophisticated parties have varying motivations that lead them to focus on one right or another, but generally these rights are meant to decrease uncertainty and increase flexibility for the beneficiary. Part I of this two part series on future rights will focus on the the four primary types of future rights: I. Option: Example: In consideration of receipt of a $1 million option fee, Wes is hereby granted the option to purchase all, but not less than all, of Seam’s building located at 999 Peachtree Street, Atlanta, Georgia, legally described on Exhibit A attached hereto, for a price of $150 million in cash, exercisable at anytime within 24 months after the date of this agreement. The parties will have 60 days to close after the […]

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