USA Law and Practice Contributed by: Richard L. Rosen, Leonard S. Salis and Dennison Marzocco, Rosen Karol Salis PLLC
negotiate a revision providing that the landlord’s consent is not required for certain transfers (ie, transfers between existing principals, to a prin - cipal’s family member or to an affiliated entity). Some franchisors require their franchisees to include a provision in a lease rider indicating that the landlord will be deemed to have consented to an assignment (or sublease) of the lease to the franchisor, its affiliate or another franchisee (either existing or newly approved). Franchisees (tenants) may also wish to negotiate with the landlord to include such a provision in the lease (to simplify the lease assignment process when they seek to sell their franchised business) even where the franchisor has not required or sought to include such a provision in the lease. 6.19 Right to Terminate a Lease Generally, a landlord will terminate the lease when the tenant fails to cure a default, whether monetary or otherwise. Leases commonly pro - vide that the landlord may terminate the lease without the tenant having an opportunity to cure the default, upon the occurrence of certain triggering events, including (for example) if the tenant files for bankruptcy, is insolvent or per - mits an illegal activity to be conducted at the leased premises. Leases may also permit either or both sides to terminate the lease if a casualty occurs to a significant portion or the entirety of the leased premises, and if the leased premises are incapable of being restored within a defined time period. 6.20 Registration Requirements Leases do not typically require registration or execution formalities (unlike other real estate documents, such as deeds). Most states do not require that a lease (or memorandum of lease) be recorded as a public record, although many states permit such publication. However, land - lords sometimes prohibit the tenant from record -
ing the lease (or a lease memorandum) because the landlord does not want its lease (or its key terms) to be publicly available. 6.21 Forced Eviction If the landlord terminates the lease in accord - ance with its terms (eg, following a default that either was not timely cured or was not curable), the landlord may commence a court proceeding to evict the tenant. The process for evicting a tenant varies widely depending on the jurisdic - tion and whether the tenancy is residential or commercial. (The eviction process for commer - cial tenancies moves much more quickly.) While many jurisdictions passed eviction moratoriums (and sometimes even foreclosure moratoriums) during the COVID-19 pandemic, virtually all such tenant protections have expired as of the writing of this article. 6.22 Termination by a Third Party No federal, state or local government has author - ity to terminate a lease that is entered into by pri - vate parties. However, governmental authorities may have a right of eminent domain that permits them to “take” property for public use and pay “just compensation” to the owner. As “taking” would render moot any lease at the premises, leases typically provide for their termination, with no further obligation by either side, under such circumstances. 6.23 Remedies/Damages for Breach In the event of breach and termination, landlords’ remedies vary based on the applicable jurisdic - tion. For example, a landlord’s potential “double recovery” of rent (ie, for the unexpired portion of the lease and collecting rent after it has re- let the premises) will vary based on applicable law, and may be permitted where (for example) the prematurely vacating tenant chooses not to engage in the discovery process in the litigation
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