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Real Estate Best Practices

Why Notice Addresses Matter

By December 12, 2018 No Comments

Your notice address is not a sexy topic, but it’s one that needs to be discussed. Give me two minutes.

The Set Up

  • Your landlord doesn’t receive your rent check.
  • Space contiguous to yours becomes available and the landlord knows you might need more space.
  • You park a truck, car or horse & carriage at your building overnight and that action constitutes a default under your lease.

All of these are instances where the landlord might need to give a tenant notice.  And all leases dictate how notice is to be given.  This notice language works great when the tenant only has one location.  If notices go to the tenant at that location, the tenant is assured of getting notice and curing any defaults or exercising any option rights.

The Issue

A problem arises when a tenant has more than one location.  If each of a tenant’s different leases states that landlord must give tenant notice at that specific location and that location is a remote office which is either not regularly staffed or staffed with Billy Bob who doesn’t know how to handle such a notice, the odds of the notice being received by someone who will act on it are slim.

An Example

Suppose a landlord sends the tenant notice of a change in rent payment address and that notice goes to the local office.  Further suppose the tenant’s headquarters does not receive this information and so it sends rent to the previous rent payment address.  As a result, the landlord does not receive rent.

The landlord then sends notice of default for nonpayment of rent to the tenant at the local office.  Again, the employees at the local office (Billy Bob) don’t know what to do with this notice so they make a bunch of phone calls over a two-week period trying to figure it out.  By that time, BEST CASE, the landlord accepts a late payment with penalties and late fees.  WORST CASE, the landlord declares tenant in default and pursues its remedies up to and including lease termination.

The goods news?  This is an extremely easy problem to both fix and avoid.

Avoid the Problem

When you enter into new leases, dictate that all corporate leases have the same notice address (headquarters; not Billy Bob at the local office) with a copy to general counsel or outside counsel.

Fix the Problem

To fix existing leases, send a form letter to all of your landlords (making sure you use the correct landlord notice address) stating that going forward, all notices to tenant must go to headquarters with a copy to general counsel or outside counsel.

If you want to make sure you never miss a notice date yourself, read this!


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